Trump Presidency Fuels EUR/USD Gains
As Donald Trump secured the 270 electoral votes needed to win the presidential vote, EUR/USD went on a 300 pip run higher. Will the gains continue?
This move was likely fueled by rate hike expectations softening due to uncertainty surround Donald Trump as president. At the beginning of Tuesday, the Fed Fund futures implied a near lock of a rate hike taking place in December 2016. As the votes tally and with Mr. Trump winning, those rate hike expectations began to decreases driving the EUR/USD exchange rate higher, implying a weaker US Dollar.
From a technical perspective, EUR/USD plowed higher above a resistance trend line and the 200 day simple moving average. EUR/USD even pushed into 1.1300 which was technical resistance.
If prices are able to break above the overnight high of 1.13, then the next level of measured resistance appears near 1.1460.
The key level to watch is 1.10. A break below here seals the move since October 25 as a three wave move and increases the odds of a revisit towards 1.08.
From an Elliott Wave perspective, we are considering the possibility of a double flat pattern which would continue to grind higher and possibly retest 1.18. But first, we need to see which breaks first, 1.10 or 1.13.
This is a shorter term outlook for EUR/USD. For a longer term perspective on EUR or USD, download these forecasts.
Join Jeremy on Monday’s for the US Opening Bell webinar where he discusses technical patterns to watch for the coming week. You can sign up for the free webinar here.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.