Recent reports from Reuters suggest that Marine Le Pen’s far-right party, the National Rally (RN), emerged victorious in the first round of parliamentary elections in France. The victory of a right-wing party like the RN has caused ripples in the financial market, particularly affecting the euro’s exchange rate against other major currencies.
Upon closer examination of the EUR/USD chart, it is evident that the price action has been influenced by recent political developments. A consolidation pattern, represented by an orange triangle, was forming at the end of June. However, the bullish gap, depicted in green, broke through this pattern, leading to a surge in the exchange rate.
Analysis based on technical indicators suggests that the EUR/USD rate could climb to 1.08400 if the bulls manage to overcome the resistance zone of 1.080-1.078. Nevertheless, the recent reversal from a high point on Monday morning signals the presence of strong supply forces in the market. As a result, there is a possibility that the price may retrace back to the breakout level, potentially filling the bullish gap.
Traders and investors should closely monitor the developments in the political landscape, as they have a direct impact on financial markets. The election results in France have shown how political events can trigger volatility in the currency market. It is essential to stay abreast of such events and employ risk management strategies to navigate through uncertain times in trading.
The victory of Marine Le Pen’s party in the French parliamentary elections has had a noticeable impact on the EUR/USD exchange rate. Traders must remain vigilant and adapt their trading strategies to respond to the changing dynamics of the market. As always, it is crucial to conduct thorough research and analysis before making any trading decisions.