FUNDAMENTAL ANALYSIS
Macron become President and the fear that the plague of populism would spread diminished. The Euro vs the USD skyrocketed on confidence that the EU will live on.
Combined with Mario Draghi’s more hawkish tone in his ECB press conferences, where he dropped hints that the end of the central bank’s net asset purchases may happen sooner rather than later, EUR/USD soared to the highest levels since January 2015.
Of course there was the German Election on the horizon but good old Angela would have no problem with that. Right?
which is very anti-immigration and Islam and indeed the Euro, won 13% of the vote. It’s the first far right party to win a seat in Parliament in more than 40 years.
Mrs Merkel now has to form a coalition, which won’t be an easy task. Germany could face months
integration very difficult.
As news spread of a disappointing victory, the EUR/USD opened with a gap lower, dropping from the previous Friday’s closing price of 1.19473 to 1.19143.
AfD (Alternative for Germany) is the first far right party to win a seat in Parliament in more than 40 years
On Monday 25 September the market woke up to an Angela Merkel victory, but not the victory she and the market was hoping for. Mrs Merkel had won a fourth term, however it was her party’s worst result in almost 70 years and she now needs to form a coalition. Not only that but more worrying rival party the AFD (Alternative for Germany),
of negotiations as one is formed. Whoever is chosen to partner with Merkel will provide the political direction not only for Germany but also the EU and immigration. At the same time, Angela Merkel’s weaker position will also make new efforts to work with French President Emmanuel Macron on Euro-area
continued to decline in both the European and North America sessions and as of the time of writing is trading at a 30 day low of 1.18145. The EUR/ GBP came u nde r f u r t h e r p re ss u re and as time of writing is currently t r a d ing a r ou nd 0.87618.
A f t e r concerns of the Dutch and French
elections vanished there was hope that political stability in the bloc was pretty secure and the surprises that were experienced and shocked the market in 2016 had gone, but Sunday’s election outcome has once again filled the air with uncertainty.
Tis sudden turn in AFD winning FX TRADER MAGAZINE October - December 2017 45
FX
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