{"id":16893,"date":"2025-02-24T10:51:48","date_gmt":"2025-02-24T10:51:48","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=16893"},"modified":"2025-02-24T10:51:48","modified_gmt":"2025-02-24T10:51:48","slug":"euro-gains-on-german-election-results","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/euro-gains-on-german-election-results\/","title":{"rendered":"Euro Gains on German Election Results"},"content":{"rendered":"\n<p><strong>Key Points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Euro briefly rises 0.6% on German election outcome, approaching $1.05.<\/li>\n\n\n\n<li>CDU leads with 28.6% of the vote, but coalition-building and parliamentary gridlock pose challenges.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The euro strengthened on Monday, initially gaining 0.6% against the US dollar to briefly approach $1.05, driven by trader relief following Germany&#8217;s election outcome. The conservative CDU\/CSU alliance emerged victorious, securing 28.6% of the vote. The far-right Alternative for Germany (AfD) followed with 20.8%, while the centre-left SPD took 16.4%, broadly in line with pre-election expectations.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">The far-right Alternative for Germany and Germany&#39;s Left party jointly secured one third of seats in the new parliament that is required to block changes to the constitution, including a loosening of the country&#39;s debt brake <a href=\"https:\/\/t.co\/e6x0lMSVZB\">https:\/\/t.co\/e6x0lMSVZB<\/a> <a href=\"https:\/\/t.co\/6PwGbWPdMD\">pic.twitter.com\/6PwGbWPdMD<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1893952799265739149?ref_src=twsrc%5Etfw\">February 24, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Despite the CDU&#8217;s electoral win, significant uncertainty remains as party leader <strong><a href=\"https:\/\/t.co\/rZUOglNofQ\">Friedrich Merz faces complex coalition negotiations<\/a><\/strong>. Merz must secure at least one coalition partner to form a stable parliamentary majority, with a deal involving the SPD seen as the most probable path. However, these negotiations could be lengthy due to contrasting policies and potential conflicts on spending reforms.<\/p>\n\n\n\n<p>A complicating factor is the strong showing by the far-right AfD and the Left Party, which together hold a third of the seats. This bloc can block key legislative initiatives, particularly those related to spending increases or modifications to Germany&#8217;s <strong><a href=\"https:\/\/t.co\/RR6w0P5daN\">strict debt brake rules<\/a><\/strong>. Analysts caution that this political fragmentation might hinder any immediate <strong><a href=\"https:\/\/t.co\/J4MpB5L9Jj\">fiscal policy reforms<\/a><\/strong> aimed at reviving Germany\u2019s stagnant economy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The <strong>EUR\/USD pair<\/strong> saw a <strong>notable decline<\/strong> in mid-February 2025 after a brief uptick, with the <strong>MACD shifting from positive to negative momentum<\/strong>, signaling a <strong>bearish outlook<\/strong>. The <strong>moving averages (5, 10, 30 periods)<\/strong> initially acted as support but later turned into resistance, suggesting a <strong>potential trend reversal<\/strong>. The <strong>1.05282 level served as strong resistance<\/strong>, while <strong>support near 1.04493 was repeatedly tested<\/strong>, highlighting a <strong>key short-term pivot area<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-2-1024x446.jpg\" alt=\"\" class=\"wp-image-16894\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: Bearish momentum builds as EUR\/USD tests key support, as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" title=\"\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>Looking ahead, <strong>the MACD remains below the signal line<\/strong>, indicating that <strong>bearish momentum is still in play<\/strong>. A <strong>crossover above<\/strong> could suggest a <strong>potential reversal<\/strong> or at least <strong>a slowdown in the downtrend<\/strong>. Traders should watch for <strong>breakouts<\/strong>, as a drop below <strong>1.04493<\/strong> could trigger <strong>further downside<\/strong>, while a move above the recent highs may indicate a <strong>recovery attempt<\/strong>.<\/p>\n\n\n\n<p>Markets will closely monitor coalition discussions for signs of compromise or potential deadlock. Traders should expect increased volatility in <strong><a href=\"https:\/\/t.co\/UVHGms8Siv\">euro-related currency pairs<\/a><\/strong> as the political situation in Europe&#8217;s largest economy unfolds.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a> and <a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a> now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Euro nears $1.05 as German election sees CDU win, but complicated coalition talks and policy gridlock risks remain. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":16895,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[10],"class_list":["post-16893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-forex"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/16893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=16893"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/16893\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16895"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=16893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=16893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=16893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}