- Euro struggles to find demand as markets assess EU election.
- FX trading action remains subdued amid thin liquidity.
While investors are trying to figure out the implications of the European elections on the shared currency and the EU, the EUR/JPY pair is moving in a relatively narrow trading range on Monday. Furthermore, the fact that both the U.S. and the U.K. markets are closed due to the holiday keeps the trading volume and the volatility low today. As of writing, the pair was up 0.13% on a daily basis at 122.50.
Commenting on the EU elections, “Losses for the Social Democrats and Conservatives – which lost their absolute majority for the first time since 1979 – were amply offset by gains for the Greens and Liberals, meaning that overall sentiment in parliament will remain pro-EU,” Danske Bank analysts said. However, with the German 10-year Bond yield slumping to its lowest level since July of 2016 at -0.143% and hinting at, the shared currency failed to take advantage of the elections and weakened against its rivals. Reflecting the negative sentiment surrounding the euro, the EUR/USD pair dropped below the critical 1.12 handle today.
Earlier today, in his speech titled “Global Economy: Challenges and Policy Responses,” Bank of Japan Governor Kuroda repeated that uncertainties were still high for the global economy while the data from Japan showed that the Coincident Index and the Leading Economic Index for March both came in below the market expectations but were largely ignored by the participants.
There won’t be any macroeconomic data releases from Japan on Tuesday. The European Commission’s eurozone consumer & business sentiment report will be watched closely tomorrow.
Technical levels
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