EUR/USD UNDER PRESSURE, ARTICLE 50 TO BE HECKLED?

Photo credit: jackpot.co.uk

The EUR/USD is firmly under pressure over political uncertainty in France. A new OpinionWay poll points to an increase in the chances of Le Pen in the upcoming election in April. The poll showed Front National’s (FN) Marine Le Pen on 27% for the first round vs rivals independent Emmanuel Macron and the Republican Francois Fillon both on 20%.

The seeming increase in Le Pen chances is giving traders and investors some worry as she has a strong view about the future of the European Union(EU). Her campaign is engineered on security concerns in the country following terrorist attacks in recent years and general crisis in the agricultural sector.

The Euro is vulnerable, a widening French and Germany 10-year bond yields continue to undermine the sentiments around the common currency. Today’s pressure apart from the political uncertainty also has a second leg on fresh appetite for USD buying. USD buyers are buying from the dip after last week fall from 114.950 in anticipation of the ‘Phenomenal’ tax cuts promised by President Donald Trump.

On the technical view, the pair is around 1.05700.  A break of support below 1.05600 could see 1.05000 and 1.04800 levels however, a break above resistance level of 1.05900 could lead to 1.06500. 

Traders and Investors will be eyeing German manufacturing purchasing managers index data which is expected be positive. There is also data on European manufacturing/service purchasing index.

Another pair to look at today and in the days to come is GBP/JPY as debate on the triggering of article 50 takes place. Traders and investors will be watching closely as to the kind of amendments that will be called.

Members of the House of Lords have made 30 amendments to the bill and speeches will be monitored closely for signs of the mood among the members and whether the bill in contrast to expectation could be delayed. A delay will trigger uncertainty which could drive the safe heaven yen stronger against the pair. 

DISCLAIMER: THIS ARTICLE IS BY NO MEANS AN INVESTMENT ADVISE. THERE ARE GREAT OPPORTUNITIES IN FOREX TRADING AS WELL AS RISKS. THIS PIECE AND ALL ARTICLES ON THIS BLOG ARE FOR INFORMATION PURPOSE.