The Euro (EUR) has seen a rebound due to a general pullback in the value of the US dollar. According to Rates Strategist Frances Cheung and FX Strategist Christopher Wong from OCBC, the EUR/USD is expected to remain rangebound leading up to elections.
The upcoming French elections are the main focus for the currency pair in the short term. The outcome of the elections could have a significant impact on the Euro, with a potential downside bias unless Macron’s Ensemble coalition performs better than expected.
Currently, the EUR/USD pair is trading around 1.0706 levels. While there has been bearish momentum on the daily chart, signs of this fading are beginning to show as the RSI has slightly risen. There are some risks to the upside, but it is likely that there will be two-way trades as investors navigate the uncertainties surrounding the French elections.
Key levels to watch for include support at 1.0660/70 levels (recent low) before reaching 1.06 levels. On the upside, resistance is expected at 1.0770 (50 DMA) and 1.0810 (38.2% fibo retracement of 2024 high to low, 100 DMA).
Overall, the EUR/USD pair is expected to trade within a range as investors await the outcome of the French elections.