EUR/USD: All eyes on US elections with investors avoiding any big bets

The single European currency remains in a narrow trading range slightly below the level of 1,09 as investors remain cautious awaiting developments from the most ambiguous US election battles in decades.

Betting companies give a lead in favor of candidate Donald Trump but all the polls confirm an extremely small lead in favor of one candidate or the other within the margin of statistical error.

Several opinions converge to the conclusion that the American currency will benefit in the event of a Donald Trump presidency, but this is in my believe a vague opinion as the macroeconomic data are what will make the difference.

Of course it is logical as at the moment what dominates the agenda is the presidential election that everything else takes a back seat.

Due to the history of events that took place at the Capitol in the last presidential elections with the invasion of supporters of Donald Trump, concern remains high on the agenda with possible turmoil in markets if the results are unclear and not quickly accepted by the loser.

Developments on the Middle East front remain one of the key risks in markets as Iran's response to the recent Israeli airstrike is likely to receive a response.

The prospect of a 25 basis point rate cut by the Fed at its next meeting is overshadowed by the presidential elections but will certainly be back high on the agenda relatively soon especially if the US election battle goes smoothly.

On today's agenda in terms of macroeconomic data the only standout is the ISM index that reveals the current conditions in the US service sector which is always watched with interest by investors.

I would prefer to stay on hold as the risk of major shocks in the markets due to the presidential elections although small, remains on the table.