EUR/USD holds above 1.08 amid French political uncertainty & ahead of Powell’s testimony
EUR/USD is edging lower but holds above 1.08 as investors continue to digest the surprise result of the French election and look ahead to Federal Reserve chair Jerome Powell’s testimony before Congress later today.After small losses yesterday, the market continues digesting the shock election result, which saw the left New Popular Front win, but not by an absolute majority. This means that France will have a hung parliament.The left New Popular Front gained 178 seats out of 577 and will get the first move to form a government. A hung parliament means likely political gridlock and policy paralysis, which may not be a bad thing. It could limit the spending plans of the left, keeping debt levels more manageable in France. However, political gridlock could also limit the upside of the EUR.There is no high-impacting eurozone economic data to be released today. Investors will be watching developments in France.Meanwhile, the US dollar is trading close to a monthly low as investors await Federal Reserve chair Jerome Powell’s further clarification on the path of interest rates.After a series of weak data last week, traders currently see around a 76% probability of a September rate cut, which was up from 66% a week ago.Powell will testify before Congress today and tomorrow, and his comments will be closely watched for clues over whether the Fed will cut rates in September. His testimony will be followed by crucial inflation data on Thursday. Signs of cooling inflation could add to the view that the Fed will cut rates at the end of the summer.
EUR/USD forecast – technical analysisEUR/USD rose above its 200 SMA, giving bulls the upper hand, before running into resistance at 1.0840. The price will need to rise above this to bring 1.0915, the June high, into focus.Immediate support can be seen at the 200 SMA at 1.0785. Should sellers break below here, 1.07 comes into play, the February low and the galling trendline support. 
GBP/USD holds steady after last week’s election & after a cautious BoE Haskel
GBP/USD is unchanged around 1.28, a multi-week high as traders shrug off the UK election results and focus on monetary policy positions in the US and the UK.Given that Labour Prime Minister Kier Starmer and Finance Minister Rachel Reeves are considered business-friendly, and the election result was widely expected, the pound remains supported.Trades are now turning their attention back to Bank of England interest rate expectations after policymakers have been in a blackout period since the start of the election. Yesterday, Jonathan Haskel, a Bank of England policymaker, showed caution about cutting interest rates from the 16-year high given that inflationary pressures remain in the job market, and amid uncertainty over how quickly these will fade.The market is currently pricing in around a 60% probability the Bank of England will cut rates on August the 1st for the first time since 2020. However, Haskel stuck with a more cautious stance towards monetary policy.While inflation in the UK has eased to 2%, service sector inflation remains high at 6%, and wage growth is also sticky at around that level. Policymakers will likely want to see those ease further before cutting rates.With no major UK economic data due today, attention will be on Federal Reserve Chair Jerome Powell in his speech before Congress. A dovish-sounding Powell could boost GBP/USD.
GBP/USD forecast – technical analysisGBP/USD is attempting to break out above the falling trendline dating back to July last year and the 1.28 round number. Buyers will need to clear this level to bring 1.2894 the 2024 high into focus.Immediate support is at 1.2780 the falling trendline support. A break below here opens the door to 1.27. 
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