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Hollande takes the lead on French elections

Article By: ,  Financial Analyst
April 23, 2012 9:00 AM

Hollande takes the lead on French elections. The expected triumph for François Hollande in the first round of the French elections will do little to resolve Europe’s long-running agony of debt and decline. But it is likely to realign the power politics in the EU. “This election will determine the future of Europe”.
EUR/USD
Range: 1.3174 – 1.3210
Support: 1.3177
Resistance: 1.3225

Euro-Dollar closed in NY Friday at 1.3220, off session highs of 1.3229, with the rate marked down to 1.3180 into the Asia open reacting to weekend events, namely the French election and the Dutch PM looking to salvage his austerity budget amid political chaos and seen putting the Netherland’s AAA rating in jeopardy. The rate pressed to lows of 1.3177 in early trade before picking up fresh demand interest, the rate edging to an eventual high of 1.3211 before settling back between 1.3180-1.3200 through to the European open. 1.3200 level holds the strike of an expiring option and could act to keep the rate in close touch until the run off. Offers seen placed between 1.3225-1.3230, with further interest seen dotted up to 1.3250. Support remains at 1.3177 a break of 1.3170 to open a deeper move toward 1.3150 ahead of 1.3120.

GBP/USD
Range: 1.6103 – 1.6131
Support: 1.6100
Resistance: 1.6150

Cable closed in NY at 1.6119 after the rate had been pressured to late session high of 1.6150. The rate traded the early part 0f Asia within a range of 1.6120-1.6130 before getting pressed to a low of 1.6108, as euro-sterling corrected its opening mark down from 0.8185 to 0.8176, before picking up fresh demand. Euro-sterling retains an underlying heavy tone, the rate able to survive a late NY show back above 0.8200, as the euro was generally seen under early pressure from weekend French election and Dutch political concerns. The rate settled back between 0.8180-0.8185 through the Asian afternoon and into Europe. Cable retains a bullish undertone, offers seen placed at 1.6150-1.6160, a break to open a move toward 1.6180. Support noted into 1.6100 ahead of 1.6080-1.6070.
Gold
Range: 1,640.37 – 1,643.20
Support: 1,638.65
Resistance: 1,647.35

A relatively flat end to last week trading a 1,638.65 -1,647.35 range on Friday. There is little to stimulate direction at the moment with little of note from the G20 at the weekend as the market now look towards the forthcoming Fed statement. Recent moves have been dictated largely by equity direction and the dollar movements. Fears that the eurozone economy may deteriorate after the French elections and a break down over the weekend in Dutch austerity budget talks has prompted an emergency cabinet meeting and could threaten the country’s AAA status which could weigh on prices as the dollar gains strength from recent improvements in the US economy. Gold physical demand is now starting to pick up from the likes of India who celebrates Hindu Akshaya Tritiya festival. Support at 1,638.65, 1,631.25. Resistance is at 1,647.35 and 1,654.00.

 

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