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Home » Forex Technical Analysis » EUR/USD Rises Amid US Dollar Weakness and Election Uncertainty

EUR/USD Rises Amid US Dollar Weakness and Election Uncertainty

  • November 4, 2024
  • 20

The EUR/USD currency pair commenced the week on a positive note, ascending to the 1.0900 level. The US Dollar continues to weaken as market participants anticipate the upcoming presidential election. Technical indicators suggest a bullish sentiment for the pair in the near term.

This week began with EUR/USD opening at higher levels, buoyed by a significant decline in the US Dollar, driven by shifts in betting odds regarding the election outcome. Over the weekend, PredictIt revealed a 51% likelihood for Kamala Harris to win, marking her first lead over Donald Trump in this polling since early October. Additionally, lackluster labor market reports may be further weighing down the USD, even though the market’s immediate reaction last Friday was mixed.

Recent data from the US Bureau of Labor Statistics revealed that Nonfarm Payrolls (NFP) increased by only 12,000 in October, a stark fall from the previous month’s revised gain of 223,000, and significantly below the anticipated 113,000 increase. The BLS suggested the impact of recent hurricanes may have skewed employment estimates in some sectors.

Looking ahead, Monday’s economic calendar will feature Factory Orders for September, although this is not expected to significantly influence market sentiment. Investors are likely to remain focused on the evolving betting probabilities and the latest polling information, which may pose a challenge for those looking to establish firm positions in the EUR/USD market.

From a technical perspective, the Relative Strength Index (RSI) on the 4-hour chart remains above 60, as EUR/USD trades sturdily above the crucial 200-day Simple Moving Average (SMA) currently positioned at 1.0870. Should the pair breach the 1.0900 level, it could find additional resistance at 1.0950 (the 100-day SMA), with 1.1000 as a potential target. Conversely, a daily close below 1.0870 may signal a weakening of buying interest, paving the way for a pullback towards 1.0800.

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