Ella 
EUR/USD fell to 1.0740 on Wednesday, close to this month’s low. This downtrend is mainly driven by political instability in France following a strong performance by the far-right parties.
French President Emmanuel Macron called for early legislative elections after a strong showing by the far-right parties. While Macron remains in office and retains control over foreign policy and defense, the election results could hamper his ability to implement new domestic policies and appoint ministers. Growing concerns that Macron could lose in the upcoming elections have heightened concerns about France’s financial stability.
The European Central Bank (ECB) met last week and decided to cut interest rates for the first time in five years. Nonetheless, the ECB has adopted a cautious approach to further easing monetary policy, which contributes to the current economic outlook.
Attention is also focused on the ongoing Federal Reserve meeting. While no change in interest rates is expected, the market is eagerly awaiting the Fed’s latest economic assessment and guidance. If signaled, the timing of a possible rate cut could have a significant impact on market movements.
On the 4-hour chart, EUR/USD is forming a consolidation range around 1.0750. A decline to 1.0700 is possible, after which a rebound to 1.0750 is likely, a test from below. Further declines may target 1.0660 and may continue to fall to 1.0600. The MACD indicator supports this bearish outlook with its signal line below zero and pointing to the downside.
On the 1-hour chart, the consolidation range has expanded between 1.0773 – 1.0717. A move towards 1.0750 is expected, and the formation of a trend continuation pattern suggests further declines. Exiting the range on the downside may initiate a move towards 1.0600. The Stochastic Oscillator, currently below 80, is expected to fall to 20, consistent with the possibility of further declines.
