The EURUSD pair gained 0.43% on Tuesday, November 24, with the price recovering to 1.1890 amid elevated market volatility. FX currencies gyrated sharply on news that the Trump administration allowed President-elect Joe Biden to formally begin the transition process, former Fed Chairman Janet Yellen got the nod as incoming Treasury secretary, as well as a weak Ifo reading out of Germany. The market also got a boost from news that Covid-19 vaccines will soon be available all over the world.
During the European session, the euro rose to 1.1894, after which it dropped to 1.1841. From there the price jumped back to 1.1894. Equity markets opened higher after the media wired that General Services Administration (GSA) administrator Emily Murphy recognized Biden's victory and informed him that the handover of power is underway.
That said, one sticking point remains: where the media got the idea that Trump has conceded and is willing to allow the transition of power. On the contrary, he tweeted that he would not hand over power to Biden, since the elections were rigged and the GSA did not mention who the President of the United States would be. Trump took this step because of Emily Murphy, as she was harassed, threatened and insulted. The incumbent president is confident that he did the right thing and that his decision will protect her and GSA employees. His team will submit all the evidence to the Supreme Court and in the near future we will find out who the 46th president will be. So, in the interim, let’s not jump to conclusions.
Investors also reacted positively to news that Janet Yellen could be nominated as US Treasury secretary under President Biden.
Today’s macro agenda (GMT 3)
12:00 Switzerland: ZEW and Credit Suisse economic expectations (November).
12:30 EU: financial stability report
16:30 US: second GDP estimate (Q3), durable goods orders (October), trade balance (October), initial jobless claims (October)
18:00 US: new home sales, personal spending and income (October), Michigan consumer expectations (November)
18:30 US: EIA weekly petroleum status report
21:00 US: Baker Hughes oil rig count
22:00 Fed minutes
At the time of writing, EURUSD was trading at 1.1900. Only the key pair was trading in positive territory. The euro is supported by crosses, although technical analysis shows that it will hard for the single pair to move higher unless the news flow is supportive. Today is a macro-heavy day stateside. FX players should focus on durable goods and the second GDP estimate for Q3. If the readings exceed the median forecasts, the dollar can be expected to move higher across the board.
Support for the euro is between 1.1885 and 1.1890. If sellers break through this level, the price drop will accelerate to 1.1850. Since all euro crosses are in positive territory, a pullback is possible if the price action retraces to recent highs. Buyers could break stops above 1.19 and start taking profit in the range of 1.1925-1.1930. Players are advised to watch for vaccine and US election news.