THE FRENCH CONNECTION - HOW EURUSD WILL GET IT JUMP START

Photo credit: aljazeera.com

As expected, the first round of the French election outcome was in line with market expectations.  Emmanuel Macron won with 23.9 percent of votes with Marine Le Pen coming in with a 21.4 percent. A margin that is not really significant but was able to cause a massive reaction from the market.

The euro reached a five and a half month high against the dollar. The EURUSD pair jumped to 1.09395 during the pre-market after having closed 1.0723.

The jump was well expected and all is about done in the second round of the Presidential elections unless Le Pen pulls a surprise one on all, just like with Trump and Briexit last year. At the moment,  Macron has his tail up gathering support from fellow candidates who lost, with Francois Fillon backing him for the top most prize. Fillon in his conceding speech made a scattering attack on Le Pen saying a vote for Le Pen will send France in the ‘wrong direction’.

Marine Le Pen has all to do to pull voters on her side. She has the youth on her side but it’s a tricky one even if she wins in the run-off on May 7. Why? Her party has only two seat in Parliament and her programme of taking France out of the European Union will be an uphill even if referendum is initiated. She has urged voters and supporters to show the “arrogant elites” the peoples power.

On the technical front looking at the days ahead before the second round, EURUSD is expected to play the range between 1.09395 and 1.07252. A break above 1.09395 will give a clear signal of change in the trend while a break below 1.07252 will confirm the earlier downtrend. The risk appetite however is on the upside.

With the London open coming up in few minutes we expect the EURUSD to jump even before data from Germany business climate hit our screens.

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.