EUR/JPY jumps to one-month high, thanks to French election relief

The common currency spiked in Asia, while the safe havens and funding currencies were offered after the first round of the French elections concluded with Le Pen finishing behind Macron as expected.  

EUR/JPY jumped to a high of 120.34 before trimming gains to trade around 119.10 levels. 

Polls get it right

Emmanuel Macron and Marine Le Pen advanced to the second round as widely predicted by the polls. This reinstates the credibility of the polls following the debacle (Brexit, US elections) of the last year. 

Risk-on in the markets

The rally in the EUR and other risk assets stems from the fact that the worst case scenario - Le Pen and Melenchon in round 2 - has been avoided. 

Macron is seen winning round 2

According to the latest polling about the second round, Mr. Macron is forecast to beat Ms Le Pen by 62% to 38%. The risk-on tone is likely to stay intact unless the polls suddenly start showing Le Pen in the lead. 

Le Pen lead could weigh over EUR and strengthen risk assets as she has promised Frexit referendum and suspending immigration. 

EUR/JPY Technical Levels

A break above 119.32 (Mar 23 low) would open up upside towards 120.00 (zero figure) and 120.63 (100-DMA). On the lower side, breach of support at 119.00 (zero levels) could yield a pullback to 118.23 (Feb 24 low) and 117.82 (200-DMA).