EUR/USD bulls step it up from daily support, testing 1.0900, French elections in focus

• EUR/USD is on the front foot to start the week, testing 1.09 territories. 
• The French elections have kicked started bulls into gear. 
• French President Emmanuel Macron is leading in the polls of the last round of the presidential elections.

EUR/USD is testing the 1.09 area at the start of the week following a recovery from the lows on Friday near 1.0840. The price rallied to a high of 1.0919 in the open as markets are relieved that the incumbent French President Emmanuel Macron is leading in the polls of the presidential elections. 

• French elections: Macron leads 54% to le Pen 46%, EUR likes it

 ''I'm ready to invent something new to gather diverse convictions and views in order to build with them a joint action," he said. He vowed to "implement the project of progress, of French and European openness and independence we have advocated for."

Meanwhile, the US dollar index on Friday posted its largest weekly percentage gain in a month. The focus has been on a more aggressive pace of Federal Reserve tightening to curb soaring inflation which is taking a momentary backseat to the elections on Monday. 

The index had advanced to 100 for the first time in nearly two years, reaching as high as 100.19, the best level since May 2020. It was last little changed on the day at 99.822, and up 1.3% on the week, although the news of the election has sent the index on the back foot to 99.62 the lows for today so far.

Looking ahead for the week, the European Central Bank will be in focus.'' We expect a dramatic shift from the ECB, with the announcement of an early end to QE (in May) and setting the groundwork (but not quite committing to) a June hike via a change to its forward guidance (yet again),'' analysts at TD Securities explained.

''Inflation has jumped well above where the ECB thought it would be just one month ago, and the ECB has said it would adjust the APP to reflect major shocks.''