The French election result, as many have already pointed out, was well and truly expected but the strength of the Greek vote against those parties advocating austerity, means that the EZ is in for yet another period of uncertainty. When we put this together with large stop-loss sell orders in EUR/JPY and EUR/USD, then we can explain the 100 pip+ moves that we’ve seen this morning.
It’s difficult to be bullish EUR in this environment but we should also try and avoid the sell-at-any-level trade because there will be pullbacks. The EUR/USD slide has halted thus far at a 61.8% retracement level near 1.2955 and the next major support levels in EUR/JPY and EUR/GBP are 102.50 and .8000 respectively.
