When is the French presidential debate and how could affect the EUR?

Four days before the second and final round of French presidential election, two candidates, Emmanuel Macron and Marine Le Pen, will face off for one last time in a high-stake live televised debate on Wednesday at 19:00 GMT.

Key notes:

The discussion between the pro-European Macron, a 39-year-old former investment banker, and far-right leader Le Pen, the 48-year-old scion of the National Front party, is planned to last for 2 hours and 20 minutes but is likely to go on for longer. The debate will be broadcast live on the French TV channels TF1 and France 2.

Commenting on the importance of the debate, "this is a showdown in which both candidates will be aiming for a knockout, or to at least land several good jabs. Both candidates are intensely prepping for the debate. As a matter of fact, both Macron and Le Pen cleared their schedules in the 48 hours leading up to it," said Christian Delporte, a French historian specialized in the political and cultural history of France in the twentieth century.

• French election round two: What you need to know about the run-off – HSBC

Opinion polls of viewers will be published within an hour of the debate, which will give a good idea of which candidate came on top. The latest election polls showed that Macron was leading by 59% to 41%. Although he dropped a couple of points in polls since he was leading by 61% following the first round of the election, he still is the heavy favorite to become the next president of France and tonight's debate will be the last chance for Le Pen to close the gap.

• IPSOS Poll on French election: R2 Macron seen Beating Le Pen 59/41

Implications for EUR

The debate seems to be overshadowed by tonight's FOMC meeting, but considering how the market reacted after the first TV debate, we may witness sharp fluctuations especially in euro-denominated assets. The Fed's decision will be released an hour before the debate goes underway and the EUR/USD pair could start showing increased volatility ahead of the debate. Looking at the recent technical levels, 1.10 (psychological level) could be seen as the initial target for EUR/USD ahead of 1.1070 (Nov. 1 high) and 1.1130 (Nov. 4 high) if anti-EU candidate Le Pen loses the debate, increasing the demand for the euro. In addition to EUR/USD, the EUR/JPY and the EUR/GBP pairs could gather a strong bullish momentum. An improved risk sentiment would put the safe-haven JPY under a broad based selling pressure, and the GBP could quickly lose demand amid Brexit concerns. Th EUR/JPY pair could aim for 123.30 (Jan. 27 high) ahead of 123.70 (Jan. 9 high) and 124.10 (Dec. 15 high). The EUR/GBP pair could make another attempt at 0.8530 (Last week's high after the first round of the election), and extend its rise towards the 0.8590/0.8600 area (Apr. 4 high/psychological level).

On the other hand, if the market assesses the debate as a factor that could increase the chances of Le Pen winning the second round, the euro could come under a heavy selling pressure against its rivals and push the EUR/USD pair down towards 1.0775 (200-DMA) and 1.0685 (100-DMA). Supports for EUR/JPY could be seen at 118.90 (Apr. 24 low), 118 (psychological level) and 116.45 (Apr. 21 low). The EUR/GBP pair could slip to 0.8400 (Apr. 28 low) ahead of 0.8320 (Apr. 18 low).