EUR/USD, EUR/GBP bounce back after French election as USD/JPY trades in multi-year highs
EUR/USD, EUR/GBP recover losses as gap between president Macron and Le Pen is wider than some polls had previously suggested while USD/JPY trades at levels last seen in June 2015.
EUR/USD stabilises above the $1.0806 March low
Following seven consecutive lower daily prices in EUR/USD, the currency pair stabilises above its $1.0806 early March low as France’s first round of its presidential election led to the incumbent Emmanuel Macron leading his rival Marine Le Pen by over 4% of the vote, better than some market participants had expected.
Volatility is likely to flare up again, though, in the two weeks leading up to the second round of the French presidential on Sunday 24 of April and around Thursday’s European Central Bank (ECB) meeting. For now, the trend in the pair remains clearly bearish and we thus expect it to soon slip through the $1.0806 low with the February 2020 low at $1.0778 representing the next downside target. Further down sits the $1.0727 April 2020 low.
Above last Thursday’s high at $109.38, minor resistance can be found at the late March low at $1.0945 and along the breached one-month downtrend line at $1.1038. Major resistance remains to be seen between the January low and March high at $1.1122 to $1.1185. While the cross stays below this area, the long-term downtrend remains intact.
EUR/GBP’s bounce off the £0.8305 to £0.8286 support zone has further to go
EUR/GBP’s bounce off the £0.8305 to £0.8286 support area on Friday is taking the cross towards the breached one-month uptrend line, now resistance line, at £0.8396 on the back of investors’ relief regarding the first round of the French presidential election in which the gap between president Macron and his far-right rival Le Pen is wider than some polls had previously suggested.
Further minor resistance is seen between the 16 and 25 of February highs at £0.8402 to £0.8408. Slips should find support between the 28 March and 5 April lows at £0.8329 to £0.8322, ahead of the £0.8305 to £0.8286 zone which contains several daily lows made in January, February and on the 23 of March. Further down lies the March trough at £0.8203.
USD/JPY trades in multi-year highs
USD/JPY is trading at levels last seen in June 2015 as it managed to rise above its ¥125.10 March peak earlier today, its seventh consecutive daily advance, on the back of the Bank of Japan’s (BoJ) ongoing dovish stance despite inflation hitting 3-year highs.
The ¥125.85 2015 high is about to be hit, a rise above which would engage the April 2001 high at ¥126.83 and also the May 1997 peak at ¥127.46.
Support comes in along the two-month accelerated uptrend line at ¥123.82.
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