Fundamental Analysis

• The right-wing parties have increased their seats in the European Parliamentary elections, leading to EUR being sold off.
• France has announced the dissolution of the lower house and will hold elections in early July.
• With the U.S. CPI and FOMC meetings scheduled for tomorrow, market participants seem to be in a wait-and-see mode, reducing volatility.

EURUSD technical analysis

Analyzing the daily chart of EURUSD, the right-wing parties have achieved a significant victory in the European Parliamentary elections, which includes nationalist and conservative parties. EU skeptics have secured seats, and unexpectedly, France will also hold general elections in July. For EURUSD, this development suggests difficulty in stable governance, increasing selling pressure.

However, since the centrist parties maintained a majority in the European Parliament, the impact is expected to diminish over time.

EURUSD has broken below the 200-day moving average and also crossed below the 90-day moving average. The RSI is at 45, indicating a bearish trend. There is a possibility of a decline towards 1.07 USD.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of EURUSD, it is evident that EUR is leaning towards selling following the election results. The continued rise of right-wing parties could be a bearish factor for EURUSD. This could become a significant fundamental factor. Additionally, with elections planned in both the UK and France, market participants may react to election forecasts.

The day trading strategy is to sell on rallies. The upper limit of the gap is around 1.08 USD. Entry should be around 1.08 USD, with a target at 1.07 USD, and a stop at 1.0825 USD.

Support/Resistance lines

Here are the support and resistance lines to consider in the future:

• 1.08 USD – Round number
• 1.07 USD – Round number

Market Sentiment

EURUSD: Sell: 74%, Buy: 26%

Featured Currency Pair of the Week (GBPNZD)

The GBP to NZD has declined. It approached the ascending trend line again and ended near the trend line. The European Parliamentary elections resulted in right-wing parties gaining more seats, and France announced the implementation of general elections. The GBP has also been sold off in conjunction with the EUR’s decline, possibly due to geographic proximity. Elections are scheduled in both the UK and France in July.

For GBPNZD, we will continue to watch whether it breaks below the ascending trend line.

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*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.