French lawmakers have voted. Both the left and right wings united to reach a combined vote of 331, well above the 288 simple majority needed. PM Barnier has lost a vote of no-confidence. In Germany, chancellor Scholz is expected to call for a vote of confidence on 11 Dec and the Bundestag will vote on 16 Dec. EUR/USD was last at 1.0527, OCBC’s FX analysts Frances Cheung and Christopher Wong notes.
Daily momentum is mild bullish
“Mr Barnier and cabinet will likely have to resign, and the government goes into caretaker mode. As no legislative elections can be held until 1 year after the last elections (held in July this year), snap election is not possible. The next focus is on Germany. To survive the vote, Scholz would need to receive the support of an absolute majority of 367 votes. But in the event, he fails, then Germany is likely to make way for elections on 23 Feb 2025.”
“And despite the political uncertainties, the EUR has refused to trade much lower. We believe a lot of known negatives are already in the price of EUR – slowing growth momentum, political fallout, ECB cut expectations, etc. EUR bears need a new catalyst to break lower, failing which, shorts could be frustrated.
“We still caution for the risk of short squeeze on any Euro-area positive news or poor US data catalyst. EUR still holds above its lows. Daily momentum is mild bullish while RSI remains flat. Consolidation likely. Resistance at 1.0570 (21 DMA), 1.0610 and 1.0670 (38.2% fibo retracement of Oct high to Nov low). Support at 1.0450 levels before 1.0330.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD struggles hold above 1.1000 after weak EU data
EUR/USD is having a difficult time stabilizing above 1.1000 in the European session. The data from the Eurozone showed that the Sentix Investor Confidence slumped to -19.5 in April from -2.9 in March, limiting the pair's upside despite the broad-based USD weakness.
GBP/USD holds recovery gains above 1.2900 amid fresh US Dollar weakness
GBP/USD clings to recovery gains above 1.2900 in European trading on Monday. The pair capitalizes on renewed US Dollar weakness as risk sentiment takes a fresh hit, with European traders hitting their desks. Trump's tariffs-led US recession fears and dovish Fed bets keep the USD undermined.
Gold price rebounds swiftly from multi-week low; lacks follow-through
Gold price reverses an Asian session slide to over a three-week low, though it lacks follow-through. Recession fears continue to weigh on investor sentiment and benefit the safe-haven commodity. Bets for more aggressive Fed rate cuts undermine USD and also lend support to the XAU/USD pair.
Crypto market wipes out $1 billion in liquidation as Asian markets bleed red
The crypto markets continue to decline on Monday, with Bitcoin falling below $78,000. The Asian markets also traded in the red, with Japan’s stock market extending losses to 8.5%, its lowest level since October 2023.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.