BTMU FX Strategy Research notes that the market limited reaction following the election victory for new French President Macron which was largely priced in as it just lifted EUR/USD above the 1.1000-level before reversing back lower.
However, BTMU argues that overall, EUR/USD price action as of late provides a further bearish technical signal for the US dollar in the near-term which has now fully reversed the initial Trump reflation gains.
As a result, BTMU argues that it is likely that the EUR ill revert back to being driven mainly by economic fundamentals during the rest of this year.
“We still see scope for the euro to strengthen further against the US dollar in the coming months although we doubt that it will continue to be driven by European political developments which are likely to fade into the background for a little while,” BTMU adds.
EUR/USD is trading circa 1.0950 as of writing.
Source: BTMU Research
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