One of the most important factors that could affect the markets today in the morning was the results of the European Parliament elections. Despite the day off in the United Kingdom and the United States, we start the day with a small but noticeable improvement in sentiment in the markets.
The euro seemed to gain today in the morning because the election results showed that populists did not receive such support in the European Parliament elections as previously expected. The market somewhat feared it. Now these fears are falling, and the EUR/USD has returned above 1.1200. Nevertheless, the most noticeable upward move was recorded in the EUR/JPY due to the weakness of the Japanese currency. The Japanese yen was supposed to react weakening to the words of the President of the United States. Donald Trump admitted on Sunday that during his trip to Tokyo there will be no commercial agreement with Japan. He added that nothing will be finalized until the July elections in this country. According to traders quoted by Bloomberg agency, the largest movement on the EUR / JPY pair was to correspond to leveraged funds that covered earlier short positions (the so-called short squeeze).
Meanwhile, in Britain, on the brexit front, U.K. Chancellor of the Exchequer Philip Hammond, warned candidates for conservative leaders that a government that tried to force a parliament without a deal could be overthrown in a vote of no confidence.
After the morning's volatility, it seems that the rest of the day may be quiet due to the above-mentioned days off in the United States and Great Britain and the lack of significant macroeconomic publications from Europe.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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