The far-right National Rally party looks set to claim victory in the first round, with the left-wing New Popular Front coalition expected to win about 29% of the votes and Macron's faction sitting in third with about 20% of the votes. So, what's next?
The euro is sitting higher with EUR/CHF up 0.5% to 0.9675 and EUR/USD up 0.4% to 1.0755 on the day currently. That's a surprisingly positive response but it perhaps speaks to the manner of victory that we might see from the elections itself.
Macron's alliance is dead in the water as it would seem and it's now the far-left that is causing a bit of a ruckus in trying to distract from the far-right win.
The pollsters now see Le Pen's faction easily garnering a relative majority, with some even anticipating a potential absolute majority.
Elabe estimates that the National Rally party and its allies could win 260-310 parliament seats in the second voting round. Meanwhile, Ipsos projects that they would win roughly 230-280 seats. The key number to watch in this case is 289 seats, that's the cutoff for an absolute majority.
Given that, France is likely to avoid a major political standstill where no party wins any form of majority. That's the worst-case scenario and it perhaps explains better the euro response to start the week.
Still, it's tough to be bullish on the euro right now until the dust settles. In the case of EUR/USD, it also still has key technical resistance from its 100 and 200-day moving averages at 1.0790-92 on the week.
