EUR/USD analysis: retreats from 1.1500 but poised to keep advancing
|EUR/USD Current price: 1.1446
- US mid-term elections granted Democrats the House majority, Republicans retained Senate.
- US Federal Reserve having a "non-live" meeting this Thursday, not expected to surprise.
US Mid-term elections came and went and the result was quite alike to what market players have anticipated. Democrats took the House, getting at the time being 220 seats, while Republicans reaffirmed their majority in the Senate with 51 places. The turnout was the highest in almost 5 decades, as high as 47% while the Houses will have a record number of female representatives. The dollar reacted negatively to the result, but equities welcomed the shift. US indexes rallied to fresh monthly highs while the EUR/USD pair hit 1.1499 before retreating some, as investors are now focused in the next macroeconomic hurdle, the US Federal Reserve meeting. The central bank will unveil its latest decision this Thursday, although this is one of those considered a "non-live" meeting, which means there won't be updated forecasts, neither a press conference afterward. The EU Commission will release earlier in the day fresh growth forecast, although the market's reaction to the documents tends to be limited.
The EUR/USD pair advanced up to the 38.2% retracement of the September/October slide, a major resistance level around 1.1500 that once broken, could maintain the pair on the upside during the next few sessions. From a technical point of view, and according to the 4 hours chart, the pair retains the positive tone, despite the latest pullback from the key resistance, as it seems comfortable above the 20 and 100 SMA, although still below the 200 SMA, currently around 1.1520. Technical indicators have lost their upward strength, but stabilized in overbought levels, indicating that buyers are still controlling the pair. Given that the US Federal Reserve is not expected to surprise, sustained gains above the mentioned 1.1520 level, should open the doors for an extension beyond the 1.1600 figure.
Support levels: 1.1425 1.1390 1.1350
Resistance levels: 1.1485 1.1520 1.1560
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