EUR/USD Forecast: Technically Bullish But Within Familiar Levels

EUR/USD Current Price: 1.1705

• The greenback weakens ahead of the US presidential election’s outcome.
• Financial turmoil is expected throughout the Asian session.
• EUR/USD is technically bullish but within familiar levels.

The dollar is down and Wall Street is up as investors long to know who will be the next US President The EUR/USD pair surged to 1.1739, heading into the Asian opening trading around the 1.1700 figure. Polling stations will be closing between 11:00 pm GMT and 06:00 am GMT, and the outcome on the most critical states will be out early Wednesday, and whatever those said, markets are set to rock. With 538 electors in the country, a candidate needs an absolute majority of 270 or more to win the election.

It may happen, however, that none of the two main candidates gets enough electoral votes, amid more people voting by mail due to the ongoing pandemic. The recount of mail-in ballots may take several days and even weeks. It’s quite hard to imagine that the current risk-on scenario will continue throughout the Asian session unless there’s a clear bias in the initial results of the US presidential election. Turmoil is expected in the country and hence, in financial markets.

The dust will take some time to settle and macroeconomic data may be ignored for the rest of the week but will remain relevant as a barometer of economic health. This Wednesday, Markit will publish the final versions of its Services PMIs for the EU and the US, while this last will unveil the ADP survey for October and the official ISM Services PMI for the same month, foreseen at 57.5.

EUR/USD Short-Term Technical Outlook

The EUR/USD pair is mildly bullish in the short-term, holding near the mentioned daily high. The 4-hour chart shows that it keeps advancing above its 20 SMA, which loses bearish strength, although still trading below the larger ones. Technical indicators hold within positive levels but have lost their bullish momentum. The bullish case will be clearer on a break above 1.1770, the immediate resistance level.

Support levels: 1.1690 1.1650 1.1610

Resistance levels: 1.1770 1.1820 1.1875

View Live Chart for the EUR/USD

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