EURUSD extends its steep decline as political uncertainty dampens sentiment.

EURUSD extends its sharp decline into a second consecutive day, trading near a 1.5-month low on Friday. Fresh risk aversion stemming from growing political uncertainty in France, which is affecting the entire eurozone, has put significant pressure on the single currency.

The pair has lost 1.1% of its value in just two days, increasing prospects for further weakness due to a deteriorating fundamental environment and a bearish technical picture.

Two massive bearish daily candles (Thursday and Friday) weigh heavily on the pair, with a plunge through the daily cloud and a close well below the cloud base, alongside Thursday’s bearish engulfing pattern.

The pair is on track for its second consecutive weekly loss, with long upper shadows on the last two weekly candles indicating increased selling pressure.

Strong negative momentum and moving averages in a full bearish setup further contribute to the bearish scenario.

Partial profit-taking may occur after recent heavy losses, though upticks are expected to be limited due to the very negative sentiment, providing better selling levels.

The daily cloud base (1.0737) is expected to cap any upticks.

Res: 1.0720; 1.0737; 1.0774; 1.0785
Sup: 1.0649; 1.0624; 1.0601; 1.0526