EUR/USD: Euro Gains Ground Despite French Election Shocker
2024.07.08 09:43
The euro has started the week with gains and is trading at 1.0836 in the European session, up 0.33% on the day. is coming off its best week of the year, gaining 1.19%.
France Veers to the Left in Round 2
France has been on a political roller over the past two weeks and the wild ride isn’t over yet. President Macron called a snap election in June after European parliamentary elections saw the far-right make strong gains. Macron gambled that frightened French voters would support his centrist coalition, but things didn’t quite work out that way. France went to the polls twice in two weeks and each round of voting brought a stunning result.
In the first round, Mary Le Pen’s far-right National Rally party won the most votes and seemed well on its way to becoming the largest party in parliament and perhaps even winning a majority. The second round brought its own surprise, as the left-wing alliance won the most seats, followed by Macron’s centrist alliance, with National Rally placing third.
As the dust settles from Sunday’s vote, the political system is in gridlock, with no clear winner. The left-wing alliance fell short of a majority and Macron must now pick a prime minister who will be tasked with forming a government. This could mean a minority government or an unwieldy coalition, either which could usher in a period of instability.
Despite the political uncertainty, the financial markets are steady, likely in a sign of relief that fears of a Le Pen majority did not materialize. The French stock market is steady on Monday and the euro has posted gains. It has been a good start to the week, but investors will be keeping close tabs on the fallout from France’s remarkable election.
EUR/USD Technical
- There is support at 1.0797 and 1.0752
- 1.0884 and 1.0929 are the next resistance lines
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