The Euro (EUR) continued to trade near recent lows amid political uncertainties in Europe. The pair was last at 1.0522 levels, note OCBC FX analysts Frances Cheung and Christopher Wong.
Daily momentum remains flat
“The no-confidence motion could be tabled as soon as Wednesday after Prime Minister Barnier used rare constitutional powers to force the passage of a social security bill. In Germany, the far-right AfD party is calling for Germany to leave the European Union, the EUR and the Paris climate agreement as the party prepares for snap elections likely on February 23, 2025 (there is explicit language here to leave the EU unlike its manifesto before the European Parliament elections ).”
“Please note that Chancellor Scholz is expected to call a vote of confidence on December 11 and the Bundestag will vote on December 16. To survive the vote, Scholz would need to receive the support of an absolute majority of 367 votes. The “Political uncertainties in Germany and France may firm up in the EUR in the meantime.”
“Daily momentum was flat as RSI fell. Risks are somewhat skewed to the downside. Support at 1.0450 levels ahead of 1.0330. Resistance at 1.0610 (21 DMA), 1.0670 (38.2% Fib retracement of October high to November low). The remaining week brings services PMI, PPI (Wednesday); (Thursday); Q3 GDP, employment (Friday).”
Source: Fx Street
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