FTSE 100 hovers around record highs. EUR/USD falls further as French political and fiscal uncertainty weighs.France’s political crisis continuesGerman factory orders unexpectedly fell -0.8% MoMEUR/USD trades range-boundEUR/USD is falling for a second day, dropping below 1.17 as France’s political and fiscal position keeps investors nervous.French Prime Minister Sébastien Lecornu surprised the markets on Monday by resigning from the government only 27 days after being appointed, and just hours after announcing his new cabinet.Opposition leaders are calling for a snap election, and President Mcroon’s credibility is being severely damaged after five prime ministers in just a few years.Successive prime ministers have struggled to push a complex budget through a fragmented parliament. Tax increases and spending cuts are necessary to reduce France’s ballooning deficit.Meanwhile, ECB President Christine Lagarde stated on Monday that the disinflationary process is over; however, Vice President Luis de Guindos warned that geopolitical risks and weak domestic growth mean that the possibility of another rate cut remains on the table.Data today showed that German factory orders contracted, defying expectations of a 1.4% increase in August.The US dollar is rising, boosted by the weakness of the yen and the euro due to political and fiscal concerns in France and Japan.There is no U.S. economic data today as the government remains shut down for 7th day, so trade balance figures will be delayed. However, a slew of Federal Reserve policymakers are set to speak, including Michelle Bowman and President Trump’s new appointment, Stephen Mirren, who could set the US dollar’s direction.EUR/USD Forecast – Technical AnalysisThe EUR/USD trades above its multi-month rising trendline, before encountering resistance at the 2025 high of 1.1920 and easing lower. The price is trading in a consolidation pattern, caught between 1.1780 on the upside and 1.1650 on the downside.Sellers supported by the RSI below 50 will need to break below 1.1650 to extend losses towards 1.1580, the late August low.Should the support of the longer-term trendline hold, buyers will look to rise above 1.1780 and 1.1830, bringing 1.1920 back into focus.FTSE 100 Hovers Around Record HighsFTSE 100 trades 15% higher this year to a high of 9518Miners & pharmaceuticals have lifted the FTSEFTSE 100 is entering overbought territoryThe FTSE is little changed on Tuesday after rising to a record high in the previous session.The UK index has risen to record levels, up 15% this year, boosted across recent weeks by strength in specific sectors, including miners, as they tracked metal prices higher. With gold trading at record levels above 3950, precious metal miners such as Fresnillo and Endeavour Mining are trading around record highs.Pharmaceuticals have also supported gains in the index. Stocks such as GSK (LON:GSK) and AstraZeneca (LON:AZN) have benefited from more clarity surrounding Trump’s tariffs and pricing in recent weeks.The FTSE had been lagging its counterparts in the early part of this year, mainly due to its limited representation of tech stocks. However, with tech valuations appearing slightly overstretched in the US, investors have been seeking areas of opportunity in markets such as the UK, where large-cap value and commodity names dominate.On the earnings front, tobacco giant Imperial Brands is rising 2.7% after reaffirming its full-year outlook and announcing a £1.45 billion share buyback for next year.Separately, Shell is rising 1.3% after projecting significantly higher gas trading performance in the third quarter.On the data front, Halifax reported that house prices fell 0.3% in September, marking the first drop in prices since May. House builders are under pressure with Persimmon and Barratt falling 0.6% each.Looking ahead, there are no major economic data releases due in the US due to the shutdown. Attention will be on Fed speakers to drive sentiment.FTSE 100 Forecast - Technical AnalysisThe FTSE 100 trades within a rising channel dating back to April 25. The price reached a record high of 9518 yesterday and hovers close to that level today. The RSI is heading into overbought territory, so a period of consolidation or a move lower may be expected.Buyers will look to extend gains towards 9620, the upper band of the rising channel.Support is seen at 9360, the August high. Below here, 9250 is the 50 SMA, and the lower band of the channel comes into focus. A break below 9100 negates the uptrend.Original Post