The EUR/USD pair is teetering on the edge, hovering near its support zone of 1.07-1.0720 during Tuesday's American session. The Euro finds itself in a downward spiral as political upheaval in France sends shockwaves through the market. President Emmanuel Macron's unexpected move to dissolve parliament and call for a snap election has rattled investor confidence, igniting fears about the country's political stability.

Macron's drastic decision followed exit polls from the EU parliamentary elections, which indicated a significant victory for Jordan Bardella's far-right National Rally, securing 32%-33% of the vote. This was more than double the percentage won by Macron's centrist alliance, underscoring a dramatic shift in the political landscape.

Adding to the Euro's woes, the European Central Bank's cautious stance on interest rates is doing little to buoy the currency. ECB policymakers are concerned that the progress towards their inflation target might falter, given the sluggish pace of wage growth. ECB President Christine Lagarde remarked on Monday that last week's rate cut doesn't guarantee a continued downward trend in rates, suggesting there could be periods of rate stabilization. 

The EUR/USD is facing downward pressure, with the pair hovering near the critical support area of 1.07-1.0720. This decline is largely attributed to political instability in France following President Macron's unexpected decision to call for a snap election. The technical chart highlights the potential support at 1.07234, where the price may consolidate or attempt a rebound. However, the bearish sentiment could persist, especially if the support fails to hold, pushing the pair towards the lower trendline support (1.0670):

Across the pond, market participants are eagerly awaiting the United States Consumer Price Index data for May and the Federal Reserve’s policy announcement on Wednesday. Annual core inflation, which excludes food and energy prices, is anticipated to have slowed slightly to 3.5% from April’s 3.6%. The core CPI is expected to maintain a steady monthly increase of 0.3%.

The Federal Reserve is widely expected to hold interest rates steady at 5.25%-5.50% for the seventh consecutive time. Thus, all eyes will be on Fed Chair Jerome Powell’s press conference and the updated dot plot, which will provide insights into the future trajectory of the federal funds rate.

Meanwhile, the Pound Sterling is struggling against the robust US Dollar in Tuesday's New York session. The GBP/USD pair's upward momentum has stalled, weighed down by disappointing employment data and the firming US Dollar, which is bolstered by expectations that the Federal Reserve will delay easing monetary policy once again. 

The UK Office for National Statistics reported a decline in employment for the fourth consecutive period, with a loss of 140K jobs in the three months to April, though this was an improvement over the 177K drop recorded from January to March. Additionally, the ILO Unemployment Rate rose to 4.4%, surpassing the anticipated 4.3% and marking the highest level in over two years. This labor market data reflects the strain on businesses grappling with the Bank of England's elevated interest rates.

The GBP/USD pair is showing signs of weakness, having failed to breach the medium-term resistance line near 1.29. This inability to break higher, coupled with the shifting fundamental backdrop, suggests increasing bearish pressure on the Pound. The technical chart reveals that the price has already tested the lower bound of the rising channel and is now consolidating near this level. With lackluster UK employment data and the expectation that the Federal Reserve will delay monetary easing, the risk of a bearish breakout is mounting. If the pair dips below the lower bound, it could signal a significant downward move, potentially triggering further declines: