The start of the week was dramatic for the euro, despite the success of Angela Merkel for a fourth term during the German federal elections on Sunday, September 24, the Christian Democratic Union (CDU) and the Christian Social Union (CSU) win 33% of the vote. The ruling party's current partner the Social Democratic Party (SDP) printed the worst result since the Second World War by getting 20.5%, prompting the leader of the party to describe this day by bitter today, and the shock was in the success of the far right-wing party to enter parliament for the first time in half a century, represented by the Alternative for Germany Party (AFD), which has not been established for 4 years.
The EUR opened on an up-price gap and continued to retrace throughout the day. The EURUSD is currently approaching the important support level at 1.1830, which represents the neckline of the head and shoulders pattern on the 4 hour chart, and with breaking that level, the pair is likely to continue its decline targeting 1.15 levels again.
Also, during the weekend, New Zealand's parliamentary elections were held on Saturday (September 23rd), which resulted in the ruling National Party winning 46% of the vote, followed by the Labor Party (35.8%), and New Zealand First Party, which will be the kingmaker in forming a coalition.
The New Zealand dollar has declined since the beginning of trading today, where the NZDUSD reached the level of 0.7250, which represents support before rising slightly to levels of 0.7260 currently.
Japan's Governor Haruhiko Kuroda, declined to comment on the current JPY levels, said the Bank of Japan would be ready to take necessary action as inflation still away from the required levels, he said this morning.
Markets also followed the European Central Bank's (ECB) President Mario Draghi's testimony before the European Parliament this evening, confirming the strength of the euro-zone economy and the current economic recovery needs further rise in inflation.
In oil markets, crude oil prices rose to their highest level since July 2015 at 51.76$ a barrel, after major oil producers said global markets were on track to rebalance, while Turkey threatened to cut oil flow from Iraqi Kurdistan to its ports.
The price of gold has stabilized above the strong support area at 1280/1290 dollars per ounce, and rose today to reach its highest level since September 20 at 1308$ per ounce, as some investors worried about the recent German elections.
