EUR/USD: Dragged by political noises – OCBC

Euro (EUR) fell further amid fresh political uncertainties. EUR/USD was last at 1.1619 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Risks skewed the downside

"President Macron has to make a choice to either appoint another PM, dissolve the National Assembly or tender his resignation (which is of low probability at this point). There are expectations that a legislative election will be called soon."

"If he opts for this option, then France are back to the polls within 20 – 40 days upon dissolution of the National Assembly. Additionally, the Netherlands will hold General Elections on October 29. These political developments may still pose downward pressure on the EUR in the near term."

"Daily momentum is bearish while RSI fell. Risks skewed the downside. Support at 1.1550, 1.1460 levels. Resistance at 1.1690 (50 DMA), 1.1740 (21 DMA). While the broader fundamental outlook remains supportive of the euro, we see room for EUR to correct lower before layering in on dips."