EUR/USD Price Forecast: Uncertainty about US election outcome pressures the USD

Valeria Bednarik FXStreet

EUR/USD Current price: 1.0896

US election’s outcome keeps the US Dollar under pressure on Tuesday.
The Federal Reserve is having a monetary policy meeting this week.
EUR/USD maintains a modest bullish bias in the near term, resistance at 1.0932.

The EUR/USD pair battles to recover above 1.0900 after retreating to 1.0871 during Asian trading hours. The pair keeps trading in a well-limited intraday range as big headlines loom. The United States (US) presidential election tops the list as the country will head to the polls on Tuesday to decide whether Kamala Harris or Donald Trump will become the 47^th US president.

Investors dump the US Dollar ahead of the result, which may completely change the financial and fiscal frame. Additionally, the Federal Reserve (Fed) will hold a monetary policy meeting and announce its decision on Thursday, marking the next big headline that may shake the FX board.

Ahead of Wall Street’s opening, the better tone of Asian and European equities adds pressure on the safe-haven USD. US indexes remain pressured while government bonds advance, which may continue ahead of the election’s outcome.

Data-wise, the Eurozone had nothing relevant to offer. The American session, however, will bring the September US Goods and Services Trade Balance and the final versions of the October S&P Global Composite and Services PMIs.

EUR/USD short-term technical outlook

From a technical point of view, EUR/USD has made little progress, trading above 1.0866 –the 23.6% Fibonacci retracement of the daily slump between 1.1208 and 1.0760–while remaining below the 38.2% retracement at 1.0932. In the daily chart, the pair offers a modestly bullish stance, trading above its 20 and 200 Simple Moving Averages (SMAs), with the shorter one maintaining a bearish slope below the longer one. At the same time, technical indicators advance around their midlines, falling short of suggesting another leg north.

In the near term, EUR/USD is neutral-to-bullish. The 4-hour chart shows a mildly bullish 20 SMA, providing intraday support while advancing above the 100 SMA. At the same time, technical indicators hold within positive levels, although without enough upward strength to hint at an upward extension. A break beyond the 1.0930 may encourage buyers, but the most likely scenario is little action ahead of the US election outcome.

Support levels: 1.0865 1.0820 1.0770

Resistance levels: 1.0935 1.0990 1.1020

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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