EUR/USD: Political noises to undermine – OCBC

FXStreet Insights Team FXStreet

Euro (EUR) slipped yesterday on news that French PM Lecornu resigned after less than 1 month on the role. Pair was last at 1.1677 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

2-way trades still likely

"This is the 3rd PM after Bayrou and Barnier to leave office, since December-2024. But post-resignation, President Macron tasked Lecornu 48 hours to work on a plan for the 'stability for the country'. This feels like Macron is 'buying time' and by Wednesday, Macron has to make a choice to either appoint another PM, dissolve the National Assembly or tender his resignation (which is of low probability at this point)."

"Additionally, the Netherlands will hold General Elections on October 29. These political developments may still pose downward risk on the EUR in the near term. However, the broader fundamental outlook remains supportive of the euro, suggesting a buy-on-dips approach."

"Daily momentum is mild bearish but decline in RSI moderated. 2-way trades still likely. Resistance at 1.1745 (21 DMA), 1.1810 and 1,1920 levels (2025 high). Support at 1.1680 (50 DMA), 1.1640 levels (100 DMA, 23.6% fibo retracement of Mar low to Sep high), 1.16 (100 DMA)."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD remains above 0.7200 after China's trade data

AUD/USD sits above 0.7200 in the Asian session on Tuesday, near its highest level since May 14. The US Dollar stays under pressure as a rallying Japanese Yen outweighs support from hawkish Fed bets and geopolitical tensions. This, along with firming expectations for another RBA rate hike later this month, acts as a tailwind for the Aussie. However, mixed China trade balance data keep the pair restricted.

USD/JPY recovers to 154.00 amid hawkish BoJ repricing

USD/JPY is recovering from six-month lows of 152.89, retesting 154.00 in European trading on Tuesday. However, the upside attempts appear limited as Japan's upbeat wage growth data and Q2 GDP revision cement bets on a BoJ rate hike next week and continue to boost the Japanese Yen. Meanwhile, US Dollar selling remains unabated despite hawkish Fed expectations and rising geopolitical tensions, lending additional support to the pair.

Gold traders seem hesitant below $4,450 as Fed rate hike bets counter softer USD

Gold retreats to the lower end of its daily range heading into the European session, though it holds above the $4,400 mark amid a softer US Dollar. However, hawkish US Federal Reserve expectations, along with persistent geopolitical uncertainties, offer some support to the safe-haven buck and keep a lid on the non-yielding bullion.

Ripple and Stellar outlook: Hold bullish bias above EMAs as derivatives back upside

Ripple (XRP) and Stellar (XLM) hold above the key support zones on Tuesday, hinting at an upside move. Derivatives metrics further support the recovery, with both altcoins showing positive funding rates and rising long positions. Derivatives data shows a bullish tilt among XRP and XLM traders.

Europe in focus: September 2026

Six major net contributors demanded substantial cuts to the European Commission’s proposed 2028–2034 EU budget. Germany, Denmark, the Netherlands, Austria, Finland and Sweden issued a joint position on 27 August calling for the nearly €2 trillion proposal to be reduced by several hundred billion euros and rejecting additional common EU borrowing.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.