All eyes are on the primary round of the French election this Sunday. There are really three key scenarios that can occur in this Sunday’s French election. These scenarios could really shape the performance of markets like EUR/USD (and EUR crosses) and more indirect markets, such as the FTSE 100 and gold.
It’s important to understand that the first round vote could actually be key in the whole election process and while everyone is fixated on the second round on 7 May, there are permutations of the first round vote that could cause extreme moves in markets this Monday.
GBPUSD is trading range bound, following a sharp appreciation earlier in the week. Crucially, we have seen the bottom of this triangle come in at $1.2775, which marks the key historical resistance level from December 2016.
USD experienced a particularly volatile day yesterday, as the initial uptrend-driven rally was undermined by comments from the US Treasury Secretary, Steven Mnuchin, and Donald Trump regarding tax reforms and the healthcare bill. As such, the uptrend remains in play until we break below key resistance levels.
The Japanese Yen edged up overnight, seemingly buoyed as traders remain jittery about first-round voting set for this weekend. The Japanese currency’s gains look somewhat out of place against a backdrop of seemingly improving sentiment.
It seems that we will continue to see gold weaken, with the pullback in a broader uptrend still playing out. Trendline resistance has held back gains over the past two sessions, and a drop through $1275 would likely open the way to $1264, the previous high in this rally.
The brief recovery four WTI yesterday has given way to more losses, and now we look to see if the sellers can breach $50.52
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.