EUR/USD Gaps Higher on French Election Relief

7月1日

EUR/USD has gapped higher this morning following the results of the French parliamentary elections. Traders reacted positively to the news that Marine Le Pen’s far-right Rassemblement National (RN), despite winning the first round with 33.2% of the vote, is unlikely to secure an outright majority in the parliament. This outcome alleviated fears of political instability and a potential shift in France’s economic and EU policies that could arise from a far-right-dominated government. Let’s explore EUR/USD’s technical outlook following the news…

EUR/USD Daily Candle Chart

EUR/USD has gapped above the small series of lower swing highs that formed last week (blue dotted line on the chart below). This is effectively a wedge breakout, but the lack of a dominant trend paints a mixed picture for EUR/USD.

Prices have just touched the volume weighted average price (VWAP) anchored to the early-June swing highs. This is a key level as it represents the true average price of EUR/USD bears who sold at the recent top.


Past performance is not a reliable indicator of future results

EUR/USD Hourly Candle Chart

EUR/USD’s hourly candle chart clearly defines this morning’s opening gap – an area that is likely to provide some support moving forward. This timeframe also shows EUR/USD finding some resistance at the anchored VWAP.

‘Gap close’ pullback traders will be waiting for EUR/USD to fill this morning’s gap before buying, while short-term momentum traders may look for a break and hold above the anchored VWAP.


Past performance is not a reliable indicator of future results

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