(MENAFN- Daily Forex) The EUR/USD finished Friday's trading near the 1.07108 level, essentially putting the currency pair within the middle of its one week price range, this as financial institutions brace for the days ahead.
The election results in France which will be seen late tonight and into Monday morning, this will likely impact the EUR/USD tarding pair . The currency pair finished last week's trading near the 1.07108 mark which may be considered a solid result considering the EUR/USD was trading below the important 1.07000 ratio for a large amount of time from Tuesday until Friday with rather dynamic fluctuations taking place.
While it may be important to say the election in France has been braced for and traded into the EUR/USD already, day traders need to understand the daily intraday volatility which will certainly be seen on early Monday is expected to be dynamic. Importantly, the results of the first round of voting which will be seen tomorrow by financial institutions will be used as an early warning sign regarding what to expect from the election results on July the 7th/USD Equilibrium as Nervous Tensions are Seen
However, day traders should also know financial institutions may have already sold off the EUR/USD as a preemptive move the past two weeks. The price action of the currency pair this past week was actually rather calm in some degrees and showed some optimism, and support which has been seen since the 14th of June did hold back lower depths. Thus the question regarding equilibrium should be considered. It appears that support near the 1.06700 depth is considered a rather strong barrier. As for resistance, the higher level does appear to be 1.07500 for the moment.
Day traders should not be aiming for the 1.06700 or the 1.07500 marks, they need to be much more cautious, particularly if they are using leverage. The results of the French vote will be important, but financial institutions also know the European Union doesn't solely move according to internal French politics. The reaction from financial institutions should be anticipated as potentially volatile, but unless there is a spectacularly surprising outcome the EUR/USD may react within the known range seen the past two weeks of trading.
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U.S Holiday and Light Forex Volumes to End this Week
The U.S 4th of July holiday will be celebrated on Thursday, which will effectively shutter financial institutions in the State from the middle of this week into the 8th of July. The lack of volume from the U.S will also create a vacuum of sorts for the EUR/USD. However, because the French election is today and traders will have three days to react to the outcome before U.S institutions disappear, the EUR/USD may see fast conditions early this week, with relatively calm waters after Wednesday.
Economic data this week will take a back seat to the behavioral sentiment shifts caused by the results of the French election today. Again, the results in the EUR/USD may have already been bet on by financial institutions which will simply react to the voting outcome tomorrow as they pursue their mid-term outlooks.
EUR/USD Weekly Outlook:Speculative price range for EUR/USD is 1.06675 to 1.07710
While the EUR/USD does appear to be oversold by many speculators, short-term conditions for speculators should be treated with caution. Traders should not get overly ambitious. The pursuit of quick hitting trades may be very tempting early tomorrow which try to follow technical trends, but speculators will have to be on the lookout for fast reversals.
The knowledge that another round of voting will be seen on the 7th of July needs to be understood, this could actually create cautious trading tomorrow if the results still do not point to the ultimate outcome regarding political control in France. The known range in the EUR/USD will be tested tomorrow and traders should be on the lookout for momentum particularly if key support or resistance levels are challenged early on Monday.
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