European Majors & Crosses across the board went sharply lower after the Greek and French elections outcome which backed anti-austerity candidates against French President Sarkozy.
Concerns about the new French President and Greek PM would need a better working coalition government. Germany's statement is that they would be closely working with the new President on their stance on austerity towards building growth for the European economy as a whole. However the likely differences with Germany from the most recent resolution on the Debt crisis will continue to weigh on the market as investors have somehow foreseen that these differences may eventually weaken the single currency like the EURUSD & weigh more on the cross rate EURGBP to their lowest levels before and real deal on the new government would come out.
EURUSD DAILY - ASIAN TRADING SESSION
This has prompted the USDx to jump start the Asian trading week with a higher opening gap at 79.97; which would attempt to break the 80.05/10 1st (R1) resistance level for the USDx. With enough momentum to build up the rally from last week's move may well be the catalyst to further the USD strength to finally continue its original trend direction. The previous week's market squeeze between the Euro and the Pound will remain tight while adding the jolt the market received from the RBA would continue to be a trade war factor between European, US and Asian major market players in the Forex market.
Likewise the EURUSD and the EURGBP opened at 1.2960 & 0.8060 respectively in the Asian trading sessions as an immediate reaction to the European elections. And this was a welcome treat for short-sellers maintaining trade position until now. However, expect some volatile reaction on both directions after the opening gap which would lead to some profit taking and trade adjustments/ liquidations for long trades caught flat-footed with this fundamental news & movement in Europe.
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