EUR/USD: FOMC risks coming up, but a whole lot more risk to follow; a 6% move here we come?

Currently,  EUR/USD  is trading at 1.0920, down -0.09% on the day, having posted a daily high at 1.0938 and low at 1.0904.

• French election: Is the market too comfortable with a Macron win?

EUR/USD is the pair of the month so far with respect to expectations and market chatter. Of course, while we are getting set for the FOMC and indeed the nonfarm payrolls, the French elections hold the largest risk for traders. When looking around, there are expectations of the euro to pick up further demand on a Macron win, potentially over a 1% move as a land in the sand on te knee jerk. 

• Visit the French Elections Page here!

However, the biggest risk is Le Pen winning. Should Le Pen win and Macron concede, there is chatter of a 6% move to the downside on the knee jerk. Of corse, this is all JUST market chatter and there are never any certainties in the markets. For example, the euro ha already had a very strong bid on the back of the first round election and the market has got very bullish on just this event while in months previous, the forward forecasts were far lower than where spot is today, so there is the argument of even a sell the fact scenario. Either way, it will be a nail biter for markets considering the strong probability of a high abstention rate favouring Le Pen. Today's debate will be key for Le Pen as a final chance to rally up supporters who are still undecided. 

• When is the French presidential debate and how could affect the EUR?
• FOMC meeting: no game changer for the USD

Meanwhile, we have the FOCM coming up as the next major risk. Valeria Bednarik, chief analyst at FXStreet explained that the US Central Bank is largely expected to keep rates unchanged after the hike seen last March. " The statement and the following press conference will be taking centre stage, as policymakers seem to be shifting the path of monetary tightening from rates to the balance sheet." The price action leading into the meeting today has been fading on the 1.09 handle, mostly down to strong PMIs from the US data today and a good enough ADP report ahead of nonfarm's. EUR/USD is essentially consolidating the end of March correction from 1.0880. 

EUR/USD levels

EURUSD's most recent high was 1.0936 and 1.0946 below the double top at 1.0950. Without momentum either way on the 1.09 handle, this leaves the short-term technicals looking neutral. Short-term patterns suggest a top at 1.0950 or a bull wedge-like consolidation ahead of another push higher," explained analysts at Scotiabank."Essentially, a break under 1.0850 or sustained gains above 1.0950 will determine the direction of the next 100/150 bps in spot from here, we feel," the analysts added.