EUR/USD has been extending its gains after Biden was called the next President of the US. Further responses to the elections, central bankers and covid figures are eyed while Monday's 4-hour chart is pointing to overbought conditions, FXStreet’s Analyst Yohay Elam briefs.
Key quotes
“Democratic candidate Joe Biden has been elected the 46th President of the United States – the news burst on Saturday when markets were closed. While stocks continue higher and the safe-haven dollar is falling, there is room for a ‘buy the rumor, sell the fact’ response.”
“There are several post-election developments to watch: Final counting from states: If Biden enlarges his lead, it would raise pressure on reluctant Republicans to acknowledge the result and bring the elections to a happy end. If the gap in Pennsylvania and Arizona tighten, it could cause uncertainty. Biden nominations: He will have to strike a balance between the left-wing of the party and the centrists. Investors will be tuned to who would be the next Secretary of the Treasury. Lael Brainard, a Governor at the Federal Reserve, is the leading candidate and would soothe markets. Senate races: Democrats still have a chance to gain control of the upper chamber. Two runoffs in Georgia due on January 5 could result in a 50-50 split in the Senate. Opinion polls toward the two races in the southern state may begin moving markets.”
“Christine Lagarde, President of the European Central Bank, will be speaking amid rising COVID-19 cases and their economic impact. The second lockdowns are set to have a smaller effect in comparison to the initial ones, at least according to German and French officials. With the US elections gradually taking less headspace, covid could gain prominence in moving markets.”
“The Relative Strength Index on the 4-hour chart is at 70 – indicating overbought conditions. Resistance awaits at the round 1.19 level, which was also a peak in September. It is followed by 1.1920, another peak from the same period. Some support awaits at 1.1860, a swing high from last week, and then at 1.1840.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD ticks lower toward 0.6200 after Australian Nov inflation data
AUD/USD remains pressured toward 0.6200 following the release of Australian consumer inflation figures, which showed a slowing in the trimmed mean annual CPI , boosting the odds for an April RBA rate cut. Meanwhile, US-China trade war fears and a softer risk tone add to the weight on the pair.
USD/JPY steadies at around 158.00, Fed Minutes awaited
USD/JPY holds steady at atound the 158.00 mark early Wednesday amid uncertainty over further BoJ rate hikes. Further, the Fed's hawkish shift, the recent surge in the US bond yields and a bullish US Dollar support the currency pair, though Trump trade risks cap gains. US ADP data and Fed Minutes eyed.
Gold consolidates near $2,650 amid mixed cues; looks to Fed Minutes
Gold price stabilizes near $2,650 after the pullback from the $2,665 barrier as concerns about Trump's tariff plans and geopolitical risks support the safe-haven bullion. That said, diminishing odds for further Fed rate cuts and elevated US Treasury bond yields-led US Dollar strength weigh on Gold price ahead of Fed Minutes.
Crypto market surged to $3.9 trillion record market cap as Solana's revenue plunged in December: Binance
In a report on Monday, Binance Research stated that the crypto market reached a market capitalization milestone of $3.9 trillion in December. The researchers suggest anticipation surrounding Donald Trump's upcoming pro-crypto administration could stretch the bullish momentum in the coming weeks.
Five fundamentals for the week: Nonfarm Payrolls to keep traders on edge in first full week of 2025 Premium
Did the US economy enjoy a strong finish to 2024? That is the question in the first full week of trading in 2025. The all-important NFP stand out, but a look at the Federal Reserve and the Chinese economy is also of interest.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.