• EUR/AUD initially dipped but recovered ground as investors assessed political turmoil in France.
• France is now left with only a caretaker government after outgoing Prime Minister Sebastien Lecornu resigned along with his cabinet on Monday, just hours after unveiling the new line-up.
• Lecornu’concluded two days of talks with political leaders without reaching a deal to resolve the crisis, but indicated that a path exists for appointing a new prime minister soon.
• Lecornu’s unchanged cabinet and strict 4.7% budget deficit goal constrain bargaining options. If the budget isn’t approved by October 13, France could face emergency fiscal steps in early 2026.
• Immediate resistance is located at 1.7694 ( 50% fib), any close above will push the pair towards 1.7710 (SMA20)
• Support is seen at 1.7572 (Oct 10th low) and break below could take the pair towards 1.7500 (23.6%fib).
Recommendation: Good to sell around 1.7720, with stop loss of 1.7800 and target price of 1.7650
