EUR/USD unlikely to make a move until French election
The EUR/USD outlook remains uncertain amid a backdrop of fluctuating US dollar strength and significant upcoming events. The US dollar has been slightly weakened due to a lack of major news and the US holiday, compounded by a disappointing retail sales report. Investors are eyeing key central bank decisions from the Bank of England and the Swiss National Bank on Thursday, alongside US economic data such as jobless claims, building permits, and the Philly Fed Manufacturing Index. The release of global PMI data on Friday will also be pivotal in determining the short-term direction of the dollar. However, the primary focus for the EUR/USD pair remains on European politics, particularly the French snap election starting on June 30.
The EUR/USD outlook is tightly linked to the outcome of the French election, with the current stabilization of French bonds and the narrowing of the German-French yield spread indicating a temporary calm in investor sentiment. A significant rally in the EUR/USD is unlikely until after the election results are clear, with any potential gains before then likely driven by a drop in the dollar. The euro is expected to remain under pressure in a USD-negative environment until the political landscape in France becomes more certain. In terms of technical analysis, the EUR/USD is trading within established ranges from earlier this year, with a slightly bearish short-term bias. Key support levels are identified around 1.0650-1.0700, while resistance levels are noted at 1.0750 and 1.0790, with a major hurdle near 1.0950.
By Fawad Razaqzada, market analyst at FOREX.com
The EUR/USD outlook is tightly linked to the outcome of the French election, with the current stabilization of French bonds and the narrowing of the German-French yield spread indicating a temporary calm in investor sentiment. A significant rally in the EUR/USD is unlikely until after the election results are clear, with any potential gains before then likely driven by a drop in the dollar. The euro is expected to remain under pressure in a USD-negative environment until the political landscape in France becomes more certain. In terms of technical analysis, the EUR/USD is trading within established ranges from earlier this year, with a slightly bearish short-term bias. Key support levels are identified around 1.0650-1.0700, while resistance levels are noted at 1.0750 and 1.0790, with a major hurdle near 1.0950.
By Fawad Razaqzada, market analyst at FOREX.com
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