marctomarket.com / by Marc Chandler / Nov 21, 2016
The euro is trying to snap a ten-day losing streak. Its bounce today has stopped a little shy of the five-day moving average that is found near $1.0650. It has not traded above this short-term moving average since the November 9.
The news over the weekend is primarily political in nature. Sarkozy is going to retire (again) after taking a drubbing in the Republican Party primary in France. Fillon, the self-styled French Thatcher unexpected beat Juppe, but without 50% and therefore the results set up the run-off this coming weekend. It is as if, knowing their candidate will likely face Le Pen in the final round next spring, the Republican Party might as well chose the most extreme laissez-faire candidate.
In Germany, Merkel officially announced her candidacy for a fourth term as German Chancellor. This was widely expected. Merkel has moved to protect her flanks after her immigration policy caused a fissure in her alliance with Bavaria’s CSU. The national election is planned for next fall. The anti-immigration and anti-EU AfD party have come on strong to win representation in all but a few German states. The most likely outcome is for a continuation of a grand coalition between the CDU and SPD. It is possible that another party is needed to form a coalition government. If so, the FDP are more likely than the Greens.