- Friedrich Merz’s CDU has won Germany’s election, but coalition talks could delay government formation and policy direction.
- Euro traders are watching the 61.8% to 50.0% Fibonacci zone as uncertainty over Germany’s political landscape weighs on the currency.
Polls have now closed in Germany’s parliamentary elections.
Exit polls indicate Friedrich Merz’s center-right Christian Democratic Union (CDU) has secured a clear victory, positioning him as Germany’s next chancellor.
The far-right AfD is projected to achieve its best result yet, currently in second place with 20.2%, nearly doubling its 2021 support. However, the Bundestag’s composition remains uncertain, and Merz has ruled out cooperation with the AfD.
Prolonged coalition talks could lead to a government divided on economic recovery and international policy, which could be bearish for the euro. With this in mind, the 61.8% to 50.0% Fibonacci zone could be an area of interest, which coincides with flattening longer moving averages.
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