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EUR / USD rallies amid Joe Biden’s increasingly likely victory in the US presidential election

The EUR / USD pair is trading up almost 0.2% today on eased pressure from the US dollar.

 

The American currency began to lose its position in the market on Wednesday, when the market began to receive reports that Joe Biden was leading in the counting of votes. The balance of power in many states has changed dramatically since the beginning of the counting of votes cast by mail. Trump lost leadership in a number of key states and ended up lagging far behind his rival. According to the latest information, Biden is gaining 264 electoral votes out of 270 needed to win. Trump has secured the support of 214 voters. These numbers are still subject to change as the vote count continues in some important states.

 

The likelihood of Biden winning is growing every hour. Many traders were counting on such an outcome of the elections, so the volatility in the financial markets is gradually decreasing. Investors' appetite for risk is growing, and interest in the dollar is gradually declining.

 

In the afternoon, news related to the US presidential election will continue to have the strongest impact on trading, but there are also events in the economic calendar that could change the balance of power in the market. The FOMC is meeting tonight. Investors do not expect the regulator to change the main parameters of monetary policy, but it is possible that the regulator may send signals to the market about possible changes at the December meeting. Softer FRS rhetoric may further weaken the dollar's position in the market.

 

Meanwhile, the epidemiological situation in Europe continues to deteriorate. Despite strict quarantine measures in Germany, a new anti-record has been set for the number of registrations of new infections per day, almost 20 thousand people. Obviously, the second wave of the pandemic will increase pressure on the EU economy, which will limit the growth of the European currency in the future, but today this news is unlikely to have a significant impact on trading. The tone of the trades is still set by the American dollar.

 

The chart is dominated by bullish signals. After a false breakdown of the previous local minimum at 1.1610, the currency pair showed a fairly strong growth and is now trading well above the 1.1700 level. Today we can expect the continuation of the upward movement with the nearest target at the level of 1.1785. In case of breakdown, growth to 1.1865 can be expected.

 

  • Resistance levels: 1.1785, 1.1865, 1.1905.

 

  • Support levels: 1.1700, 1.1635, 1.1610.

 

The main scenario - growth to 1.1785.

 

An alternative scenario - a breakdown of support at 1.1700 and a fall to 1.1635.

 

The current fundamental outlook is moderately positive. We consider longs near the level of 1.1700.

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