EUR/USD Price Forecast: Consolidates around 1.1700 ahead of French confidence vote

EUR/USD wobbles around 1.1700 as investors await the outcome of French confidence vote.
This week, investors will pay close attention to the ECB’s monetary policy announcement.
Weak US labor demand has weighed on the US Dollar.

Sagar Dua FXStreet

The EUR/USD pair trades in a tight range around 1.1710 during the late Asian trading session on Monday. The major currency pair consolidates as investors await French confidence vote, which is scheduled during European trading hours.

In late August, France Prime Minister (PM) François Bayrou called for a confidence vote after opposition party members opposed his €44 billion budget package. A report from Reuters has stated that opposition leaders across the political spectrum made clear they would vote to oust Bayrou.

"The government will fall," said Jean-Luc Melenchon, the leading figure of the hard-left France Unbowed (LFI) party.

Such a scenario would lead to a snap election in the French economy in times when the entire Eurozone economy is struggling with global trade risk and growing tensions between Russia and Ukraine.

This week, European Central Bank’s (ECB) monetary policy meeting on Thursday will also be the key trigger for the Euro. Economists expect the ECB to leave interest rates steady.

Meanwhile, the US Dollar (USD) trades vulnerable after the release of weaker-than-projected United States (US) Nonfarm Payrolls (NFP) data for August.

EUR/USD trades close to the downward-sloping trendline plotted around 1.1740 from the July’s high at 1.1830. The near-term trend of the pair is bullish as it holds above the 20-day Exponential Moving Average (EMA), which trades near 1.1662.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting a sideways trend.

A fresh upside move in the pair would become inevitable to near the July’s high at 1.1830 and the round-level resistance of 1.1900 if it breaks above Friday’s high of 1.1740.

On the flip side, a downside move by the pair below Friday’s low of 1.1583 will expose it to the August 5 low of 1.1528, followed by the August 1 low of 1.1392.

EUR/USD daily chart

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