Euro (EUR/USD) LatestNational Rally leads the polls but is unlikely to win an outright majority.A fractured French government would weigh on the Euro.
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Trading Forex News: The Strategy
The first round of the French elections takes place this coming Sunday with the right-wing National Rally party (RN) seen heading the polls but without enough seats to form a government. The RN is predicted to receive anywhere between 31.5% to 35% of the vote, according to three recent polls, with the People’s Front, a left coalition is placed second with between 28% and 29.5% of the vote. President Macron’s alliance is forecast to get between 19.5% and 22% of the vote. With the current ruling party polling in third place, the fractured nature of the forecast vote will see French politics weigh on not just French assets but also the Euro in the coming days. The second, and final, French vote will occur on Sunday, July 7th.The most widely traded FX-pair, EUR/USD, has recently been driven lower by a combination of US dollar strength and Euro weakness. Later today the latest US durable goods data and the final reading of US Q1 GDP will be released today. While both of these releases can move the US dollar, traders will be looking forward to Friday’s US core PCE report for guidance ahead of the weekend. High-importance US data and this weekend’s French elections will pave the way for a volatile backdrop for EUR/USD traders.For all market-moving data releases and events, see the DailyFX Economic CalendarEUR/USD is back below 1.0700 and struggling to move higher. The series of lower highs and lower lows started in late December remains in place, and this will continue if the April 16 multi-month low is breached. Below here, a double low around 1.0516 made in late October 2023 becomes the next downside target. Initial resistance is seen around the 1.0750 area.EUR/USD Daily Price ChartAll charts using TradingViewRetail trader data shows 66.18% of traders are net-long with the ratio of traders long to short at 1.96 to 1.The number of traders net-long is 14.14% higher than yesterday and 25.04% higher from last week, while the number of traders net-short is 14.48% lower than yesterday and 22.26% lower from last week.We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall.Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/USD-bearish contrarian trading bias.
of clients are net long.
of clients are net short.
Change in
Longs
Shorts
OI
Daily
14%
-14%
3%
Weekly
25%
-22%
4%
What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
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