Both USD and EUR traders are looking out to the upcoming events that will affect the currencies. Today, the U.S. employment report is coming out, while in Europe the focus will be the second and final French presidential election on Sunday, May 7th. WTI Crude Oil continuous to decline heavily, as suggested, reaching a 6-month low.
Euro Rose from Data Ahead of French Election
Euro picked up against all the majors on Thursday and early Friday, as it found support on the strong Eurozone PMI and retail sales came out. The only exceptions were Swiss franc and Swedish krona, as euro remained virtually unchanged against them. The services sector in the 19-nation area rose to 56.4 in April beating market expectations to meet the last estimation of 56.2 from 56.0 in March. Composite PMI also surpassed market forecasts by rising to 56.8 from 56.7 before. Meanwhile, retail sales expanded by 2.3% annualized in March versus 1.7% in April.
On Sunday, May 7th, France will give its final vote for the next President of the country. The candidates are far-right Marine Le Pen and centrist Emmanuel Macron. If Le Pen, which represents National Front party, wins the election plans to withdraw France out euro and hold a referendum for the country exit the European Union. On the other hand, Macron supports En Marche! Party and is the favourite of the polls with almost 20% difference from Le Pen.
EUR/USD – Technical Outlook
After some days of a battle between the two market forces in the area between 1.0850 and 1.0950, bulls took the lead of the EUR/USD pair and pushed it sharply higher by 0.91% in Thursday’s trading session. The clear break of the 1.0950 strong level to the upside and the daily close above it, suggest that the pair has more potential to rise. Moreover, the 50-SMA on the daily chart is about to cross the 200-SMA, a bullish signal. A dynamic pull above the 1.1140, it may drive the pair even higher to 1.1300.
On the other hand, if the NFP number comes out well above forecasts and boost the U.S. dollar we may see some losses to the world's most traded pair. If EUR/USD drops below 1.0850 key level, the pair will halt at 1.0780 support level. The MACD oscillator is rising in the positive area and crossed above its trigger line endorsing our bullish scenario. Meanwhile, RSI, after a rise had, it got stuck slightly below 70 level.
Read the full article on JFD Research.