Bearish Gap in EURUSD After EU Elections Swing Right
The 25 bps ECB rate cut didn't hurt the Euro, but the NFP and the EU elections which are leading to French elections are weighing on EURUSD.
The euro rallied despite the 25 bps rate cut by the ECB on Thursday, the ECB president Lagarde’s comments at the press conference suggested no commitment for further cuts, making this a hawkish cut. However, the strong NFP numbers sent this forex pair 100 pips lower on Friday, while the Elections for the European Parliament which leaned to the right, gave this pair another push lower, sending the price 50 pips lower after opening with a bearish gap last night, with EUR/USD falling below 1.08.
The announcement of fast legislative elections by French President Macron, in response to the results of the European elections and the strong showing of Marine Le Pen’s National Rally party, has added to the pressure on the EUR/USD exchange rate. The outcome of the European elections, where Liberals and Greens lost considerable ground, has heightened political uncertainty in the region.
President Macron’s decision to call for legislative elections on July 7 and June 30 is seen as a response to the shifting political landscape and the need to address the growing influence of nationalist and right wing movements, which should translate into a weaker Euro if it gets serious.
EUR/USD Chart Daily – Breaking Below All MAs
This move has contributed to a sense of instability in the eurozone, impacting the value of the euro against the US dollar. As a result, the EUR/USD exchange rate is likely to remain volatile and heavy in the near term, as investors assess the implications of these political developments on the economic and financial outlook of the Eurozone.
Eurozone Sentix Investor Confidence Released by Sentix – 10 June 2024
- Eurozone June Sentix investor confidence 0.3 points vs -1.8 points expected
- May Sentix investor confidence 0.3 points vs -1.8 points expected
Investor confidence in the euro region has improved for the ninth month in a row. In June, the expectations index increased as well, rising from 7.8 points in May to 10.0 points. Sentix continues to identify Germany as the country that requires greater progress in order to boost confidence and continue the recovery.
EUR/USD Live Chart
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