The EURGBP price faces strong resistance at the 0.85060 level. If further weakness emerges, the pair has support at the 0.8246 level.
French President Emmanuel Macron is facing the prospect of a humiliating defeat at the hands of National Rally (RN), led by Marine Le Pen. A new poll said his decision to call a snap election after his party was defeated in European elections is set to backfire.
French voters go to the polls on June 30, and the pro-Macron coalition of parties, which includes the President’s Renaissance party, has 19.5 percent of the vote. The Ipsos poll for Le Monde newspaper has the RN party with 36% and the left-wing coalition New Popular Front with 29%.
The election could seriously affect French policy, as Macron would be compelled to appoint a prime minister from the largest party. Under the French constitution, the PM is charged with running domestic affairs, while the president only has influence over defence and foreign policy.
The EURGBP also has economic data to absorb tomorrow with the 14:45 pm HKT release of French inflation data. The preliminary number for June could move closer to the 2% target after 2.3% last month. German unemployment will follow at 15:55, and markets expect a smaller 15k increase over last month’s 25k. Finally, Italy also sees inflation released at 5 pm HKT.
The French elections are on a Sunday, which could add volatility to the Sunday open for the FX market. The following week will be highlighted by European inflation and the UK’s election on July 4. Britain is also expected to see a leadership change as Rishi Sunak’s Conservative poll lags the Labour Party by a wide margin.