Euro Drops to 17-Month Low Amid French Budget and Political Uncertainty

The euro has dropped to a 17-month low against the dollar due to concerns over France's budget deficit and political uncertainty in the euro zone. This has increased risk aversion in currency markets and put pressure on the euro, while the Japanese yen remains weak despite warnings from Japanese authorities about its depreciation. The announcement of a Spanish general election for November 29 has added to the uncertainty, pushing the euro lower against both the yen and the Swiss franc.

As of now, EUR/JPY is trading at ¥178.26, showing a modest daily gain. The pair is holding above its key short-term moving averages but remains below longer-term trend benchmarks. Technical indicators suggest mixed momentum signals, with the Ichimoku Kijun at ¥177.7 acting as immediate support. The MACD delivers a strong buy signal, and the ADX confirms elevated trend strength, while both RSI and CCI register buy readings, indicating mild bullish momentum.

Looking ahead, EUR/JPY is expected to trade within a range of ¥177.23 to ¥179.01 over the next 2-3 sessions. A confirmed breakout above resistance could push the pair toward the top of the range, while a dip below immediate support at ¥177.7 might lead to a deeper pullback. Analysts note that the pair faces persistent bearish pressure with limited rebound potential, and the current analysis highlights increased political uncertainty and potential volatility risks if EUR/JPY decisively breaks out of its short-term consolidation range.