On Wednesday the 7th of November, the euro/dollar pair closed slightly up. Buyers have lost all of the gains that could have been made from the results of the US Congressional elections. The euro fell from 1.1500 to 1.1425.
Congress is now split, with the Democratic Party in control of the House of Representatives and the Republican Party in control of the Senate. President Donald Trump congratulated everyone and expressed his desire for bipartisanship with the Democrats.
Day's news (GMT 3):
- 9:45 Switzerland: unemployment rate (Oct).
- 10:00 Germany: exports (Sep).
- 10:45 France: exports (Sep).
- 12:00 Eurozone: ECB economic bulletin.
- 16:15 Canada: housing starts (Oct).
- 16:30 Canada: new housing price index (Sep).
- 22:00 US: Fed's monetary policy statement, Fed interest rate decision.
Fig 1. EURUSD hourly chart
The elections are over. The dollar index has won back the losses incurred. Market participants have again switched gears, returning to the situation around the EU and Brexit. From 1.15, the price dropped to 1.1436, rolling back to the balance line.
At 12:00 the ECB will issue the Eurozone economic bulletin. It may have a short-term impact on our pair. In the evening, the Fed will announce the interest rate decision. There is no rate hike expected at the November meeting and the accompanying statement will not include the publication of economic forecasts. Fed Chair Jerome Powell will hold a press conference in December.
The pair is in the middle of the rising channel in the range of 1.1360-1.1550. If we draw a trend line from 1.1302, we'll see the intermediate support at 1.1410. Now the 67th degree is acting as a support. I think that the price will remain above the trend line and close somewhere around 1.1437. It'll take a day for the dust to settle after the US Congressional elections. If the trend does not hold at 1.1410, the fall will accelerate to 112nd degree or the lower border of the channel at 1.1366.