The Euro dropped to 1.1677 after French Prime Minister Lecornu resigned less than a month into his term. This is the third resignation since December 2024, and now the President needs to stabilize the country within 48 hours. General Elections in the Netherlands are scheduled for October 29, which could pose risks to the Euro. However, analysts believe the Euro’s overall outlook is stable. They recommend buying during dips, with technical support at 1.1680 and resistance at 1.1745. Current market trends suggest the Euro shows slight bearish momentum and a steady RSI decline, presenting trade opportunities. Analysts are forecasting movements in both directions, with resistance at 1.1810 and support at 1.1640 based on technical analysis. In other news, the FXStreet Insights Team notes a weak performance for the UK Pound and a continued rise in USD/JPY. Gold prices are near record highs. The publication discusses market opportunities and risks due to changes in Japan’s leadership. FXStreet reminds readers that the information comes with risks and is not meant as investment advice. It’s crucial to research thoroughly before making financial decisions, as open markets can be unpredictable. The recent resignation of the French Prime Minister puts the EUR/USD in focus, as it fell below 1.1700. President Macron has a deadline on Wednesday to address government instability, creating short-term uncertainty for the Euro. Early October 2025 polling shows the National Rally party leading with 30% voter support, adding to market anxiety. The Dutch general election on October 29 presents further political challenges. Current polls indicate the Euroskeptic PVV party is in the lead with about 25%, raising concerns about future coalitions and fiscal policies. This situation may limit any significant rises in the Euro’s value as the election date approaches. Despite the political turmoil, the Eurozone’s fundamentals are relatively strong, suggesting that current dips may present opportunities. In September 2025, Eurozone core inflation fell to 2.1%, close to the ECB’s target. Meanwhile, preliminary Q3 GDP showed a modest growth of 0.2%. This economic stability contrasts with the political issues and supports the idea of buying during weakness. Looking back at the period before the 2017 French election, we see a similar situation. The Euro faced pressure due to worries about a Euroskeptic win but rallied sharply once a market-friendly result was confirmed. A similar recovery could occur if Macron stabilizes the government, rewarding those who bought during the downturn. With heightened event risks, we can expect increased volatility in EUR/USD options over the coming weeks. Purchasing short-dated puts with strikes around 1.1650 or 1.1600 is a simple way to hedge or speculate on further declines before Macron’s decision. A long straddle could also be a strategy to trade any price jumps, regardless of direction. For those confident that fundamentals will prevail, selling puts at strike prices below the current market, possibly near the 1.1600 support level, is an appealing strategy. This allows traders to earn premiums from the increased volatility while aiming to buy the Euro at a better price. This approach fits well with the idea of buying during politically driven dips.

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