EUR/USD and EUR/GBP rally post French election TV debate while GBP/USD stalls
EUR/USD and EUR/GBP were boosted by yesterday’s French election TV debate which does not seem to have dented the incumbent’s chances of winning Sunday’s election while GBP/USD stalls.
EUR/USD swiftly bounces off support
EUR/USD rally off last week’s low at $1.0758 has taken the cross to the minor $1.0933 to $1.0945 resistance zone. The rally in EUR/USD has come on the back of falling US Treasury yields and a slightly widening gap in the opinion polls between the centrist incumbent Emmanuel Macron and his far-right rival Marine Le Pen, projecting the former to secure between 53% and 57% of the vote in Sunday’s second round of the French presidential election.
Yesterday’s over 2 1/2-hour long television debate between the two candidates probably didn’t have much of an impact on the overall outcome which the Euro took as a positive and accelerated higher. Were the $1.0933 to $1.0945 late March low and 6, 7 and 11 April highs to be exceeded, a pause in the currency pair’s downtrend would likely unfold, especially since positive divergence can be spotted on the daily Relative Strength Index (RSI). A possible upside target is the February-to-April resistance line at $1.105. Potential slips should find support around the 8 April low at $1.0837.
Key support remains to be seen at the mid-April trough at $1.0758, below which the April 2020 low can be made out at $1.0727 and the March 2020 low at $1.0638.
EUR/GBP’s bounce has reached the 55-day simple moving average (SMA) at £0.8361
EUR/GBP bounce off last week’s £0.825 low has gained traction after yesterday’s French election TV debate between the remaining two candidates, the incumbent President Macron and his right-wing rival Marine Le Pen, is not deemed to have dented the former’s better standings in the polls.
Above the 55-day simple moving average (SMA) at £0.8361, which is currently being probed, lies the 11 April high at £0.838, a rise above which would change the short-term outlook back to being bullish.
Minor support can be found at the 28 March low at £0.8322 and also at the 8 April low at £0.8308 today. Further potential support can be seen at the 23 March £0.8296 low.
GBP/USD struggles along the two-month downtrend line at $1.3082
The recovery in GBP/USD from Tuesday’s low at $1.2981 seems to have been short-lived with it failing along the two-month downtrend line at $1.3082 despite US Dollar weakness being witnessed across the board as US Treasury yields are falling back from their recent peaks.
Strong support remains to be seen between the March and current April lows at $1.3001 to $1.2973 whereas resistance above today’s intraday high at $1.3082 can be found at last week’s $1.3147 top. While the $1.3147 to $1.3182 late March and current April highs aren’t bettered, a downtrend remains in place.
Failure at $1.2973 would lead to the $1.2855 to $1.2813 area being targeted. It contains the June 2020 high and November 2020 low.
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