It’s a quiet week on the data front, but the French Elections are heating up and will influence price action for EUR/USD. The war still has no end in sight, China’s struggle with covid could soon be over, and $BTC looks like it’s about to run.
FRENCH ELECTIONS
Polls suggest that French President Emmanuel Macron is likely to win a second term on Sunday; however, an upset is still on the table as we have learnt from Trump and Brexit that polls are unreliable.
Three scenarios are in play.
Easy Macron win: Bullish for $EURO likely to start next week with a gap and break resistance above the current price.
Tight race: Uncertainty around exit polls will likely send Euro downward to lower resistance levels until Macron is declared the winner, triggering a support rally.
Le Pen win: Unlikely, but a surprise win would send Euro tumbling down to its lowest levels, perhaps touching 1.05.
CHINA
No new cases were reported outside of Shanghai, raising hopes that the peak is over and the epidemic could be squashed. Tesla also resumed production in Shanghai on Tuesday, signalling a change in the battle agists the virus.
$BTC & $GOLD
Bitcoin has found support after crashing past the 40k level and touching 38k on Monday. It now sits above 41k as it attempts to break key resistance around the 42k mark. The 3day 200MA has been a critical support line for BTC and so far remains intact. Altcoins that bled on Monday’s flash crash have also recovered well, with $Luna bouncing back 25% from its recent low.
$Gold was close to breaking the psychological 2000USD mark but has had three days of losses. The inflation-proof assets have shown some recent weakness as investors’ risk appetite increases.