5 May 2017, 13:22
Yuri Papshev

The victory of Emmanuel Macron in the first round of the presidential elections in France weakened fears about France's withdrawal from the EU. The extremely right candidate Marin Le Pen, who is in favor of France's exit from the Eurozone, is in second place in the presidential race, the second round of which is scheduled for this Sunday, May 7. If the victory still wins Marin Le Pen, then on Monday the inhabitants of France will wake up already, in fact, in another state. Marin Le Pen has already promised that the new franc will be similar to the euro, and the flow of migrants will be sharply reduced.

The euro could literally collapse if Marin Le Pen becomes president of France. Today, the focus of investors will be the publication (12:30 GMT) of data from the US labor market for April. It is expected that the number of new jobs created outside agricultural production in April rose by 185,000 (after rising by 98,000 in March), the average hourly wage increased by 0.3%, and unemployment could rise by 0.1% %, to the level of 4.6%. In general, the data can be called strong. If they are confirmed or will be better than the forecast, the dollar can significantly strengthen in the foreign exchange market. Prices of raw materials denominated in dollars, and commodity currencies can receive an additional downward impulse.

In the second half of the US trading session (17:30 GMT), the speech of the head of the Federal Reserve, Janet Yellen, will begin. It will be easy for her to talk about the Fed's plans to tighten monetary policy in the US if the labor market data comes out as positive, as expected. In this case, by the end of the day you can see the strengthening of the dollar positions.

Uncertainty in the dynamics of the dollar will arise if the US labor market data are weak, for example, if the number of jobs (NFP) comes out below 150,000.

In any case, a surge in volatility is expected during the publication of the data and at the time of the speech Janet Yellen. Predicting the same market reaction to labor market data is often very difficult. The most frequently observed sharp jump of the dollar in one direction and no less sharp subsequent rollback. Many traders in the US call the day of publication of data on the labor market during the day of wages.

 For yesterday, the EUR / USD pair increased by 100 points to the level of 1.0983, updating the maximum fixed after the victory of Macron in the first round. The resistance level of 1.0950 was decisively broken through. Today there is a pullback and a decline in the EUR / USD pair. If the data on the NFP come out strong, then the pair EUR / USD is likely to return to the zone below the level of 1.0950. Otherwise, on the wave of expectations of a successful outcome of the presidential election in France, the EUR / USD pair can update the local maximum reached near the level of 1.0990. At least, technical indicators on the 4-hour, daily, weekly charts are on the buyers side.

 Support levels: 1.0950, 1.0900, 1.0875, 1.0850, 1.0800, 1.0770, 1.0700

Resistance levels: 1.1000, 1.1200, 1.1280, 1.1340

*)presented material expresses the personal views of the author and is not a direct guide to conduct trading operations. 

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