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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