The dollar and yen gained versus most other currencies, while the euro took a knock on the latest political machinations in France as the first round of the Presidential election on April 23 draws nearer. The euro was knocked back lower on news that French presidential candidate Juppe said that he would not replace scandal-embroiled Fillon. On Friday, EURUSD, rallying some 50 pips to a 17-day peak at 1.0640 after Yellen headlines hit the wires and has now tumbled back under 1.0600, logging an intra-day low at 1.0584 before finding a toehold. The bout of volatility shows how much interbank and speculative participants are trading off news relating to the upcoming French presidential election, the first round of which will take place on April 23. The Dutch election is next week, on March 15th (the same day the Fed announces policy).
The pair now faces further pressure, by breaking the 20 period MA, in the hourly chart. Its 4-hour RSI is bearish and sloping lower, while MACD remains in negative territory. Hence further weakness is possible to be noticed during the week, while the focus is on the ECB meeting (Thursday), which will also bring the updated set of staff projections and the anticipation for NFP on Friday.
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