EUR/USD – The post-French election rally has so far been capped by a thickening daily cloud.

EUR/USD opened with a gap higher and rose to a three-week high in early European trading on Monday, boosted by the results of the first round of the French parliamentary election.

The rally was capped by the base of a thickening daily cloud following last week’s cloud twist, with subsequent easing pointing to the strength of the 1.0778/1.0800 resistance zone (daily cloud spanning between 1.0777 and 1.0791, reinforced by the converged 100/200 DMAs and psychological resistance).

Daily studies show strengthening positive momentum, mixed moving averages, while the daily cloud remains a strong obstacle.

Near-term price action may hold in prolonged consolidation while capped by the cloud, but with a slight bullish bias as long as today’s gap remains unfilled.

A sustained break higher would bring near-term bulls fully into play and open the way for further retracement of the 1.0915/1.0666 bear leg.

Conversely, a drop and close below the daily Tenkan-sen (1.0712) would weaken the near-term structure and risk a retest of the 1.0666 higher base.

Res: 1.0777; 1.0800; 1.0820; 1.0852
Sup: 1.0731; 1.0712; 1.0700; 1.0666