Financial market veterans know that there's sometimes a world of difference between what's likely to happen and what does. We have just experienced this again with the French situation: while the risk premium is high due to a domestic situation that is chaotic to say the least, last week the CAC 40 recorded its best advance since September and erased the losses of the last three weeks. Moral: it's always prudent (and worthwhile) to watch the market's behavior after each major news item, and make sure it matches your expectations before taking a position.

As it stands, the dollar index has stumbled on our resistance zone at 108.00 and has already closed below first support at 106.14, giving some credence to further consolidation. In parallel, the euro is holding on to its lows at 1.0335 and, better still, is forming an inverted head-and-shoulders reversal pattern which will be validated by a move above 1.06, for a theoretical target of 1.0860. So as not to get ahead of ourselves, we'll settle for a first target at 1.0725/80.

Source: Bloomberg

USDJPY and USDCHF continue to consolidate. The former is still expected to head for 147.90 or even 145.90 if it holds below 152.95, while the latter is attempting to validate a bearish pattern (again in the shape of a head-and-shoulders pattern), with downside targets at 0.8730 and 0.8660/30.

As for commodity currencies, AUDUSD was unable to break above 0.6555 (adjusted point at 0.6525), and thus remains in its downtrend in progress since October. However, we'll be keeping an eye on the current support zone at 0.6422/0.6395, which corresponds in particular to the line that has joined the lows since September 2022 to halt the downward momentum. The NZD/USD configuration is hardly any different, and we'll be watching for initial resistance at 0.5930 to halt the current fall, which support at 0.5810/0.5790 could effectively halt. Otherwise, we'll target 0.5635.