EUR/USD analysis: dollar maintains the bullish pace, but election has the last saying

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1037

The dollar opened the week gapping higher against the JPY and its European rivals, amid an announcement made by the FBI late Sunday, stating that the bureau has decided to take no action against Hillary Clinton over new emails related to her private server. In a letter to Congress, the director of the Federal Bureau of Investigation James Comey stated that “based on our review, we have not changed our conclusions that we expressed in July.“ that there were no grounds to recommend prosecution. The greenback maintained its momentum all through the day, although gains moderated as the day went by, as the US Presidential election looms.

In Germany, new factory orders dropped by 0.6% in September when compared to the previous month 0.9%, on the back of weaker domestic and foreign demand. Retail Sales in the EU fell by 0.2% in the same month, slightly better-than-expected, but the year-on-year reading came in at 1.1%, below a previously revised 1.2%. In the US, the FED's Labor market conditions index for October surged to 0.7, indicating continued growth in the employment sector. Anyway, is all about the election this Tuesday, and choppy trading is expected ahead of the results.

Technically, the EUR/USD pair has turned short term bearish, given that in the 4 hours chart, the price has broken below these last few days' support at 1.1060, also the 50% retracement of the 1.1278/1.0850 decline, while technical indicators maintain strong bearish slopes well below their mid-lines. Furthermore, the pair is trading back below the 200 SMA, while the 20 SMA is gaining downward strength in the 1.1090 region. The immediate support is 1.1010, the 38.2% retracement of the mentioned slide, with a break below it exposing 1.0950 for this Tuesday.

Support levels: 1.1010 1.0950 1.0910

Resistance levels: 1.1060 1.1090 1.1120

View Live Chart for the EUR/USD

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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