Euro is Waiting for French Elections

The U.S. Dollar index (DXY) is experiencing a slight decline of 0.3% to 105.46 points, while the EURUSD pair has risen by 0.4% to 1.07340. This movement appears to be more of a standard technical retreat rather than a response to the current macroeconomic conditions.

The strong June PMI readings from the United States should have bolstered the Greenback, but this hasn't occurred. Instead, the EURUSD pair has reversed its earlier decline. The Eurozone reported unexpectedly weaker PMI figures, initially pushing the EURUSD down to the 1.06700-1.06900 range. However, the stronger U.S. PMI data send the pair to the upside. So, the pair could be waiting for Joe Biden and Donald Trump debate this Thursday, or parliamentary elections in France on Sunday. Nevertheless, the downtrend for the EURUSD has strengthened.

The support at 1.06700-1.06900 could be too strong to be crashed on macroeconomic data alone. So, the release of the final GDP estimate this Thursday and Federal Reserve (Fed) favorite inflation gauge PCE index this Friday may not be enough for the pair to dive deeper.

The upcoming debate between Joe Biden and Donald Trump on Thursday might not have a significant impact on the currency market. The elections in France on Sunday could be a major event, especially if the far-right National Rally party led by Marine Le Pen performs well. This outcome could potentially push the EURUSD below the support level of 1.06700-1.06900, targeting 1.06000 and possibly further down to 1.05000. Alternatively, if the support holds, the EURUSD might rebound above 1.07800, creating good selling opportunities.