EUR/USD Gaps Higher on French Election Relief
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
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.84% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.