Fundamental Overview
The US Dollar rallied across the board yesterday as Trump got elected President of the US. The Republicans won also the Senate and the House giving us a red sweep and therefore high chances of tax cuts.
This should be the most bullish scenario for the greenback as it should lead to higher growth and less rate cuts expectations.
In fact, given the red sweep and the strong US data we keep on getting, the Fed might start to change its stance, and we could see a much earlier than expected pause in 2025.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that EURUSD broke through the key support zone around the 1.0777 following the Trump’s victory. The sellers are now in control and the natural target should be the 1.05 handle. The buyers, on the other hand, will want to see the price rising back above the 1.0777 level to invalidate the bearish setup and start targeting the 1.09 handle.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the strong resistance zone around the 1.0777 level where we can also find the major broken trendline. We can expect the sellers to step in around these levels with a defined risk above the resistance to position for a drop into the 1.05 handle. The buyers, on the other hand, will look for a break higher to position for a rally into the 1.09 handle.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor counter-trendline now defining the current pullback. The buyers will likely keep on leaning on it to target the break above the resistance, while the sellers will look for a break lower to increase the bearish bets into new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US Jobless Claims and the FOMC Policy Decision. Tomorrow, we conclude the week with the University of Michigan Consumer Sentiment report.
