Euro Sideways First, Explosion Later?
EUR/USD moved in a narrow range around 1.1710 in late Monday's Asian session, marking a consolidation phase ahead of the French confidence vote scheduled for European trading hours. The market held its position while awaiting the political direction in Paris, which could potentially trigger euro volatility.
In the background, French Prime Minister François Bayrou pushed for a vote after the opposition opposed his €44 billion budget package. Several opposition leaders have declared their intention to oust Bayrou—a scenario that could trigger a snap election at a time when the eurozone economy remains overshadowed by global trade risks and Russia-Ukraine tensions.
On the policy front, Thursday's ECB meeting is the next trigger, with consensus expecting interest rates to remain unchanged. Meanwhile, the US dollar appears fragile after weaker August NFP data, which reduced support for the greenback.
Technically, the near-term trend is likely bullish as long as it remains above the 20-day EMA of 1.1662. The 1.1740 area (the descending trendline from the July peak of 1.1830) is decisive: a break above it opens the way to 1.1830 and then 1.1900. Conversely, a drop below 1.1583 risks a test of 1.1528 and 1.1392. (ayu)
Source: Newsmaker.id
