Fundamental Overview

After closing the previous week marginally higher, EUR/USD opened with a bullish gap and climbed toward 1.0800 during the Asian trading hours on Monday. The pair corrects lower in the European morning but manages to stay in positive territory above 1.0750.

According to exit polls, Marine Le Pen's far-right National Rally (RN) party won around 34% of the vote in the first round of France's parliamentary election. The left-wing coalition New Popular Front (NFP) and President Emmanuel Macron's Together alliance are projected to receive 29% and 20.5%-23% of the vote, respectively, per Reuters.

The Euro gathered strength with the immediate reaction as Le Pen's NR's vote came in below most projections. Reflecting the improving risk mood, the Euro Stoxx 50 opened decisively higher and was last seen gaining 1.6% on the day.

In the second half of the day, preliminary June Consumer Price Index (CPI) data from Germany will be watched closely. Investors expect the CPI to rise 0.2% on a monthly basis following the 0.1% increase recorded in May. A stronger-than-forecast increase in this data could provide an additional boost to the Euro.

Later in the session, the ISM Manufacturing PMI will be featured in the US economic docket. The headline PMI is seen improving slightly to 49 in June from 48.7 in May. A reading above 50 could help the USD stay resilient against its rivals and cap EUR/USD's upside.

During the American trading hours, European Central Bank (ECB) President Christine Lagarde will deliver welcome remarks at the ECB Forum on Central Banking in Sintra. Lagarde is unlikely to deliver any comments on the policy outlook because she will speak alongside Federal Reserve Chairman Jerome Powell at a policy panel on Tuesday.