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Thomson Reuters
May 22 - 02:36 PM
EUR/USD - COMMENT-EUR/USD Decidedly Wait-And-See Before EU Vote Risk, Key Data
First appeared on eFXplus on May 22 - 12:15 PM

EUR/USD has held to tight ranges throughout Q2 so far but daily ranges have become even more constrained as key data and elections approach.
Doji candles on both daily and monthly charts show investors prefer to wait for the risk events to pass before acting.
Those two risks are likely to determine if EUR/USD extends its long-term bear trend or sees a rebound.
German Q1 GDP, French May business climate as well as Markit's May euro zone PMI results could help determine if the ECB will proceed with additional stimulus.
The PMIs are likely to gain most of the market's focus.
Polls look for better growth compared to April's results.
Downbeat results would dash any hopes of economic green shoots, sending euro zone rates and the euro lower.
EU elections begin Thursday, with results expected Sunday. The voting might not create much immediate impact but downside risks for EUR/USD could increase if anti-EU parties gain parliamentary seats in significant numbers.
Investors might avoid the euro on such as result.
Should data and elections increase bear sentiment for EUR/USD, a break of 1.1100 would be likely.
Traders would then target the 1.0850/1.0950 area.

chart: Click here

Source:
Thomson Reuters IFR Markets

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