Politics is once again temporarily becoming the main driver for the single currency. EURUSD returned to 1.0925 on Monday, gaining 0.8% from Friday's lows on reports that incumbent Macron is ahead of far-right Le Pen and will potentially get even more votes in the second round on April 24th as the majority of those voting for alternative candidates lean towards Macron.
The lowering of political risks is attracting buyers of the single currency as EURUSD fell late last week to 1.0850 - near the lows of March and a support area in the pair between February and May 2020.
In 1997, the EURUSD (then still non-cash) was gaining support near this level, but a return to 1.08 two years later triggered a capitulation. The EURUSD sell-off then had only halted two years later after the single currency had lost a quarter of its value and only after ECB interventions.