Paris Terrorist Shooting ahead of Election cursed EUR
Euro dropped notably against Dollar overnight after news of terrorist attack in Paris, just ahead of presidential election this Sunday.
Euro dropped notably against Dollar overnight after news of terrorist attack in Paris, just ahead of presidential election this Sunday. A shooting occurred on the famous Champs-Elysees shopping boulevard, resulting in death of one police and injuries of two others. The Islamic State group claimed responsibility for the shooting. The incident disrupts the election campaign as conservative candidate Francois Fillon cancelled his trip to the Alps to “first show our solidarity with the police”. Far-left Jean-Luc Melenchon said urged people to “attend to our duties as citizens: no panic, we shouldn’t interrupt our democratic process”. Far-right Marine Le Pen said she was “deeply angry” on the shooting and sad for the victims. Centrist Emmanuel Macron said that “this threat, this imponderable problem, is part of our daily lives for the years to come.”
For the moment, Macron and Le Pen are still tipped by polls to win the election on Sunday to go through to the run-off on May 7. But markets would be lightening up position on Euro, in case that both Euro sceptic Le Pen and Melenchon win. For the moment, EUR/USD is holding above 1.0676 minor support and further rise is still expected technically. But the common currency is staying bearish against Sterling and Yen. EUR/GBP is holding below 0.8511 resistance while EUR/JPY is kept below 118.23 resistance. Euro could turn softer before weekly close.
EUR/USD Daily Outlook
Daily Pivots: (S1) 1.0688; (P) 1.0733 (R1) 1.0759;
A temporary top is in place at 1.0777 in EUR/USD and intraday bias is turned neutral first. With 1.0676 minor support intact another rise is in favor. Above 1.0777 will target 1.0905 and above. But still, choppy rise from 1.0339 is still seen as a correction. Hence, we’ll pay attention to topping signal above 1.0905 again, as we’d expect larger down trend to resume later. On the downside, break of 1.0676 minor support will turn intraday bias back to the downside for 1.0569 instead.
In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. However, considering bullish convergence condition in weekly MACD, break of 1.1298 will indicate term reversal. this would also be supported by sustained trading above 55 week EMA.