Euro Drops On Fears The EU Could Collapse
Dear Traders,
The euro weakened against the U.S. dollar after investors have been reminded that the French election is one of the biggest risks this year with the prospect of a victory of Marine Le Pen fueling concern that the European Union will collapse. France’s far-right leader Le Pen unveiled a manifesto pledge on Monday in which she said that she would take the country out of the EU should she win. Within this climate of increasing anti-globalism there is not much that is positive and currencies become victims of these policies. The euro fell towards 1.07 and we will now wait for a sustained break below that support-level. If the euro falls below 1.0680 we expect further losses towards 1.0620. On the upside we see a current resistance around 1.0780.
The British pound’s downward movement came to a short-term halt near 1.2425. We are anticipating further losses in the cable and thus focus on a significant break below 1.24. A short-term resistance is however seen around 1.2550.
With no major economic data on the docket, the price action will be determined by political developments and global risk appetite.
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