Good morning traders.
Early returns from the US midterms suggest that the Democrats have retaken the House of Representatives with Trump extending his majority in the Senate.
What this will mean for the USD and subsequently the eurusd is not clear. However, now that the House is basically against Trump, he and the Republicans will have a more difficult time getting legislation passed such as tax cuts and other fiscal stimulus. In turn this could weigh on the USD. For now we will have to watch what happens and, as ever, trade our levels.
The Daily Chart
Our pair is still holding up above the 1.13 level and is making cautious ground to the upside. It took out the 1.1450 resistance over night with 1.1480 and 1.15 next up followed by 1.1550.
The Hourly Chart
After a bit of whipsawing overnight as the midterms results came in we have pushed up to 1.1450 as I write. The 1.15 level looks likely to be tested especially as it is also the 61.6 Fibonacci level of the October high and low.
Watch out for any pullbacks to 1.1425 – 1.14 for a bounce back up or if it breaks through these levels, for retests from the underside to get short.
While the market decides on the impact of these elections – or indeed, if any – I´ll be watching the lower time frame charts for entry patterns at our levels above and below the market.
Have a good one!