Monday, September 25, 2017 6:56 AM EDT
Angela Merkel won as expected, but her party lost around 20% of its previous support. Most of the lost votes went to the extreme-right AfD, which came in third, a worrying sign. In addition, the most probable coalition, a three-way “Jamaica” coalition, will be harder to construct and more limited in reforming the euro-zone.
All in all, the results are disappointing for markets and these fundamentals were compounded by the technical pattern of a weekend gap.
When weekend gaps don’t close, it’s certainly telling.Traders early in Asia did not like the result of the German elections and EUR/USD opened lower. An attempt to bounce did not reach the closing level of 1.1947 seen on Friday.
When Europe opened for the week and the gap hadn’t closed, it was a sign to sell. The pair has reached a new low of 1.1880, just above support at 1.1870. Can it extend its falls?
Here is how it looks on the chart:
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and ...
more
Disclaimer: Foreign exchange (Forex) trading carries a high level of risk and may not be suitable for all investors. The risk grows as the leverage is higher. Investment objectives, risk appetite and the trader's level of experience should be carefully weighed before entering the Forex market. There is always a possibility of losing some or all of your initial investment / deposit , so you should not invest money which you cannot afford to lose. The high risk that is involved with currency trading must be known to you. Please ask for advice from an independent financial advisor before entering this market. Any comments made on Forex Crunch or on other sites that have received permission to republish the content originating on Forex Crunch reflect the opinions of the individual authors and do not necessarily represent the opinions of any of Forex Crunch's authorized authors. Forex Crunch has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: Omissions and errors may occur. Any news, analysis, opinion, price quote or any other information contained on Forex Crunch and permitted re-published content should be taken as general market commentary. This is by no means investment advice. Forex Crunch will not accept liability for any damage, loss, including without limitation to, any profit or loss, which may either arise directly or indirectly from use of such information.
less
How did you like this article? Let us know so we can better customize your reading experience.