EURUSD hit by news from France, but still above key supports
Macroeconomic overview
Two hard-left candidates said on Friday they were discussing cooperation in their bid for the French presidency, jolting investors already nervous over the possibility of a win for far-right candidate Marine Le Pen. Socialist party officials and pollsters said cooperation between Benoit Hamon and Jean-Luc Melenchon was very unlikely, due partly to their policy differences, but French bond yields rose amid uncertainty over its possible impact on the election.
Investors believe a tie-up could either backfire and catapult Le Pen into the Elysee palace or succeed and land France with a far-left president pursuing deficit-boosting economic policies.
A Cevipof poll published on Thursday gave Hamon, who won a primary last month to become the Socialist party's candidate, 14-14.5% in the first round of the election on April 23. Melenchon, who has Communist backing, had 11.5-12%.
They are well behind frontrunners Le Pen, centrist Emmanuel Macron and Francois Fillon of the centre-right, but a combined vote could allow one of the leftists to survive the first round and possibly face Le Pen in the decisive May 7 second round.
The EUR recovered some ground against the USD today after weekend talks aimed at finding a leftist unity candidate for France's presidential election showed little sign of progress. Policy proposals outlined by Melanchon on Sunday underscored the gap he would have to bridge with Hamon to find a common platform for the April and May polls.
Trade today will be cooled by the absence of U.S. markets for the Presidents Day holiday.
Technical analysis
The support at 1.0600 (55-dma and the 50% fibo of 1.0522-1.0679 rise) is under threat after the 200-hma stemmed attempts to rally. However, we know that the move on Friday was mainly the result of news from France. Long lower shadow on February 15 is still an important bullish signal. A close above 7-day exponential moving average, currently at 1.0631, will boost confidence of EUR/USD bulls.
Trading strategy
We keep the short-term strategy unchanged.
GrowthAces.com - Daily Forex Trading Strategies
Two hard-left candidates said on Friday they were discussing cooperation in their bid for the French presidency, jolting investors already nervous over the possibility of a win for far-right candidate Marine Le Pen. Socialist party officials and pollsters said cooperation between Benoit Hamon and Jean-Luc Melenchon was very unlikely, due partly to their policy differences, but French bond yields rose amid uncertainty over its possible impact on the election.
Investors believe a tie-up could either backfire and catapult Le Pen into the Elysee palace or succeed and land France with a far-left president pursuing deficit-boosting economic policies.
A Cevipof poll published on Thursday gave Hamon, who won a primary last month to become the Socialist party's candidate, 14-14.5% in the first round of the election on April 23. Melenchon, who has Communist backing, had 11.5-12%.
They are well behind frontrunners Le Pen, centrist Emmanuel Macron and Francois Fillon of the centre-right, but a combined vote could allow one of the leftists to survive the first round and possibly face Le Pen in the decisive May 7 second round.
The EUR recovered some ground against the USD today after weekend talks aimed at finding a leftist unity candidate for France's presidential election showed little sign of progress. Policy proposals outlined by Melanchon on Sunday underscored the gap he would have to bridge with Hamon to find a common platform for the April and May polls.
Trade today will be cooled by the absence of U.S. markets for the Presidents Day holiday.
Technical analysis
The support at 1.0600 (55-dma and the 50% fibo of 1.0522-1.0679 rise) is under threat after the 200-hma stemmed attempts to rally. However, we know that the move on Friday was mainly the result of news from France. Long lower shadow on February 15 is still an important bullish signal. A close above 7-day exponential moving average, currently at 1.0631, will boost confidence of EUR/USD bulls.
Trading strategy
We keep the short-term strategy unchanged.
GrowthAces.com - Daily Forex Trading Strategies
