Another election, another surprise, and another even more surprising market reaction. Marine Le Pen is advancing to the second round of French elections, to be held on May 7th. As the news that Ms. Le Pen would be advancing made its way around-the-world to start the week, markets gapped-higher and have continued to show strength. Gold prices have driven-lower to test even deeper support, the U.S. Dollar has gapped-down to find support at the previous March low, and French equities are seeing headwinds of strength that haven’t been around since just after Mario Draghi’s ‘whatever it takes’ promise in 2012.

This week’s economic calendar is back-loaded, with quite a bit taking place on Thursday and Friday with not much else until then. We do get US Consumer Confidence on Tuesday and Aussie CPI on Wednesday along with a speech from Dr. Phillip Lowe of the RBA; but it’s the BoJ meeting on Thursday morning, the ECB meeting a little after that and a slew of GDP prints (including both the U.S. and U.K.) on Friday that will likely hold markets’ attention throughout this week.

Below, we look at three of the more pertinent price action themes for markets this week.

Will EUR/USD be able to hold gap-gains?

EUR/USD put in a significant gap to start this week’s trading that hasn’t yet filled. After closing around 1.0725 on Friday, EUR/USD gapped-up to open this week at 1.0896. Prices have worked-lower since then, but buyers have showed-up to give an element of support at the 1.0819 level, which is the 50% Fibonacci retracement of the ‘post-Election’ move in the pair. The 61.8% level of that same Fibonacci retracement helped to set the ‘swing-high’ just after this week’s open.

Chart prepared by James Stanley

Will the Dollar find Support?

Going-along with that gap-higher in EUR/USD has been a gap-lower in the U.S. Dollar. The Dollar put-in a move to the same low that was set in March; after which buyers showed-up to give us a ‘technical’ higher-low. This low is showing-up at the 61.8% retracement of the ‘post-Election’ move in DXY, taking the low set on the night of the elections up to the high sets just after the open of the New Year.