XM does not provide services to residents of the United States of America.

Tokyo players shun EUR and GBP pre-elections, after?

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>BUZZ-COMMENT-Tokyo players shun EUR and GBP pre-elections, after?</title></head><body>

June 18 (Reuters) -Tokyo players are likely to shun EURand GBP until Frenchand British elections in July. Depending on the outcomes, EUR/JPY and GBP/JPY could remain out of favour even beyond next month.

EUR/JPY fell to a 167.54 EBS lowon June 14 following right-wing party gains in European Unionelections and French President EmmanuelMacron's call for snap legislative elections.

With French politics now seen polarized asthe far-left and far-right gainin popularity at the expense of centrists, political uncertainty in Europe's second-largesteconomy should keep investors in France and Europe at large on tenterhooks.

Flight-to-quality flows saw the French 10-year OAT yield surge to 3.338% on June 11. The yield on 10-year Treasuriesfell to 4.188% on June 14 as investment flows shifted to the U.S. Flows were directed to Germany too, sending 10-year bund yieldsdown to 2.341% on June 14.

EUR/JPY has recovered somewhatfrom Friday's swoonbut the bias will likely still be sell into rallies. Key downside support is atthe ascending 55-day moving average at 167.45. The daily Ichimoku cloud is below between 165.90-166.81.

GBP/JPY is down too from its multi-year highof 201.61 on June 14. Britons will go to the polls on July 4, and the consensus view is for the ruling Conservative Party to lose.

Although anychange in policies may not be as dramatic as in France wherethe far-right iscalling for "Frexit" (Brexit has already taken the U.K. out of the EU), considerable uncertainties remain and should capsterling.

GBP/JPY support is eyed from the daily Ichimoku tenkan line at 199.97. The kijun line is at 198.30 and 55-DMA at 196.06 below.

Related nL1N3IF014. For more click on FXBUZ

Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai


Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.