The euro experienced a drop following the unexpected results of the French parliamentary elections. Despite this political uncertainty, the EUR/USD pair continues to exhibit a bullish trend, suggesting resilience in the face of economic and political challenges. In this article, we will delve into the impact of the French election results on the euro, the current state of the EUR/USD pair, and the technical analysis indicating a bullish trend.

Key Takeaways
Political Uncertainty: The French parliamentary elections resulted in a hung parliament, causing the euro to slip due to increased political and policy uncertainty.
Bullish Trend: Despite the euro's drop, the EUR/USD pair maintains a bullish trend, supported by technical indicators such as the 14-day RSI and the nine-day EMA.
Support and Resistance Levels: Key levels to watch include resistance at 1.0890, 1.0900, and 1.0915, and support at 1.0782, 1.0750, and 1.0670, which will determine the pair's near-term trajectory.
Impact of French Election Results on the Euro
The recent French parliamentary elections resulted in the left-wing New Popular Front winning the most seats, narrowly beating a far-right surge. However, they failed to secure a majority, leading to a hung parliament and increased political and policy uncertainty. This outcome has caused the euro to slip slightly, trading at $1.0829, down from $1.0836 in morning trading. The uncertainty surrounding the election results and the potential implications for France's political stability have tempered gains in the euro.
EUR/USD Bullish Trend
Despite the euro's drop due to political uncertainty in France, the EUR/USD pair has maintained a bullish trend. Currently, the EUR/USD is trading around 1.0830, having halted its seven-day winning streak. The renewed demand for the US Dollar (USD) puts some pressure on the pair, but the decline in US Treasury yields could limit the upside of the Greenback and provide support for the euro.
Technical Analysis: Daily Chart
The technical analysis of the daily chart shows a bullish inclination for the EUR/USD pair, moving within an ascending channel. The 14-day Relative Strength Index (RSI), a momentum indicator, is above the 50 level, confirming the bullish trend for EUR/USD. This suggests continued upward movement could reinforce the pair's bullish bias.
Key Support and Resistance Levels
Resistance Levels
Upper Boundary of Ascending Channel: The EUR/USD pair faces potential resistance near the upper boundary of the ascending channel around 1.0890.
Psychological Level: Further resistance is anticipated at the psychological level of 1.0900.
Three-Month High: A breakout above 1.0900 could strengthen the pair's momentum toward revisiting the three-month high at 1.0915.
Support Levels
Nine-Day Exponential Moving Average (EMA): Initial support for EUR/USD lies near the nine-day EMA at 1.0782.
Lower Boundary of Ascending Channel: Further support is seen near the lower boundary of the ascending channel around 1.0750.
Key Level at 1.0670: A breach below the lower boundary might increase downward pressure, targeting support around the key level of 1.0670, potentially serving as a rebound support level.
Market Outlook
The EUR/USD pair's ability to maintain its bullish trend despite the political uncertainty in France highlights its resilience. Investors and traders are closely monitoring the pair's movement within the ascending channel and the key support and resistance levels. The market sentiment remains cautiously optimistic, with the technical indicators suggesting further upward potential for the EUR/USD pair.
Conclusion
The euro's slip following the French parliamentary elections has raised concerns about political stability in France. However, the EUR/USD pair continues to exhibit a bullish trend, supported by technical indicators and key support levels. As the market navigates through the political and economic uncertainties, the EUR/USD pair remains a focal point for investors seeking to capitalize on its bullish momentum.
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