EUR/USD touches 1.10 as French election looms

The EUR/USD pair was able to build on yesterday's gains on Friday and refreshed its highest level since early November at 1.1000 but couldn't gather enough momentum to extend its gains as the trading volume thinned out towards the end of the trading week. The pair has been spending the last few hours in a tight range and is now trading at 1.0999, up 0.13% on the day.

The pair is about to close the week 100 pips higher from where it started as the greenback remained under a constant selling pressure throughout the week. Neither the heightened expectations of a Fed June rate hike nor the positive macro data could lend a hand to the USD as these developments were not seen as surprises. On Friday, the US Dollar Index fell to its lowest level since Trump's election victory at 98.42.

• CME Group FedWatch's June hike probability leaped above 80%

Moreover, the euro received an additional boost ahead of the final round of French presidential elections on Sunday. After the anti-EU candidate, Le Pen's failure to impress the potential voters on Wednesday's live TV debate, Macron stretched its lead in the latest polls, further easing the concerns over political instability in the euro area. The most recent election poll conducted by IFOP showed that centrist Emmanuel Macron is seen beating Le Pen on Sunday 63% vs. 37%.

• France: Second round of the presidential election in the limelight - BBH

Technical outlook

With a decisive break through 1.10 (psychological level), the pair could aim for  1.1070 (Nov. 8 high) and 1.11 (psychological level). To the downside, supports align at 1.0950 (daily low), 1.0900 (psychological level) and 1.0820 (Apr. 24 low).

• Euro on the move - SocGen