:Macron leads French elections after round one, EUR boosted
:ECB rate decision on Thursday with a focus on withdrawal of APP purchases and rate guidance
:EUR/USD key technical levels considered ahead of the ECB event
The Euro remains susceptible to geopolitics, most recently, the French elections and the latest Russian assault on the east of Ukraine. This last weekend saw French nationals cast their votes in the French election with polls ahead of the vote suggesting the gap between the favorite, Macron, and his nearest competitor La Pen, narrowing. In Justin McQueen’s election piece last week, he mentioned that French and German bond spreads widened ahead of round one of the election process but not to the same degree as in the 2017 elections when Macron held a more of an advantage.
This suggests the market has neglected to take into account a shock La Pen victory, a viewpoint that appears to be correct based on an interior ministry count that placed Macron on 27.6% of the vote with La Pen on 23.41% with 97% of the votes counted. The euro opened the week stronger on the back of the results and remains near opening levels.
In addition, Russia has refocused its assault on the east of Ukraine but has been met with strong resistance. The offensive seeks to take control of Mariupol as this would link up areas of Russian control to the west and east. The euro has been highly responsive to deteriorating conditions in Ukraine due to geographic and economic proximity to the region.
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