How EUR/JPY trades in the coming week hinges almost entirely on the outcome of this weekend’s French election. The results will affect the euro and risk appetite, which effectively amplifies EUR/JPY’s potential reaction. Chances are Marine Le Pen and Emmanuel Macron will be the last 2 standing and euro’s fate will depend on who has the wider margin. If Le Pen earns more votes, EUR/JPY will crash to 116 and if the margin is large enough EUR/JPY could hit 115. If Macron wins by a wide margin, EUR/JPY will soar but if the 2 candidates remain neck to neck, EUR/JPY could drift lower in fear that Le Pen still has a good chance of becoming France’s next President.

Technically, this week’s rally in EUR/JPY stopped right at the 20-day / 100-day SMA cross. That’s now resistance. A pullback in EUR/JPY should take the pair to at least 116 with 115 being the main support level.