The Euro (EUR) has been on the rise lately, benefiting from a weaker US Dollar (USD) and the likelihood that Le Pen’s party may not secure an absolute majority in the upcoming second-round run-off. According to analysts at OCBC, more than 200 candidates from the left-wing alliance and Macron’s coalition have withdrawn from the race, leading to the possibility of a hung parliament in France. This scenario would be more favorable for the EUR compared to a right-wing majority.
In terms of technical analysis, the EUR has been gaining momentum and is currently trading at 1.0790. Key resistance is seen at 1.0810, with a decisive break above this level potentially pushing the currency higher towards 1.0870 or even 1.0930. However, further gains would likely require a softer USD. On the downside, support levels are seen at 1.0730/50 and 1.0660/70.
With the US Non-Farm Payrolls (NFP) data release on Friday and the results of the French election on Sunday, there is expected to be increased volatility in the markets. Traders should be prepared for potential 2-way risks as new information becomes available.