• EUR/USD has hit a one-week high amid hopes for a decisive victory for Biden in the US elections.
  • A "sell the fact" response" to an announcement and worrying covid statistics could change the picture.
  • Thursday's four-hour chart is painting a bullish picture.

How close is Democrat Joe Biden to becoming the 46th President of the United States? Markets seem to be pricing that in. The former Vice-President is leading against President Donald Trump in the electoral college – 253 to 214 according to the latest tallies and networks could project Biden as the winner at some point on Thursday. 

Trump is urging friendly Fox News and other networks to retract their decision to call Arizona for Biden. The president is trailing in the Grand Canyon State as well as in neighboring Nevada but hopes for a late victory in the final count.

On the other hand, the Republican incumbent wants counting to be stopped in Pennsylvania and Georgia, where he is in the lead, but slow-counting of in cities and of mail-in ballots is et to skew heavily toward Democrats. 

Arizona, Nevada, and Georgia may declare winners on Thursday – perhaps late in the date. Winning any two would elevate Biden's electoral college count to 270 or more – securing the White House. If not, it goes down to Pennsylvania. 

What about the stimulus? Republican Senator Susan Collins won reelection in Maine, all but sealing Democratic hopes of flipping the upper chamber. This implies that the GOP could block a generous stimulus package and that should have dampened the mood.

However, Senate Majority Leader Mitch McConnel said on Wednesday that he would be ready to talk about aid to states – a key Democratic demand that the GOP seems reluctant to give ground on. Moreover, some analysts note that Biden and McConnell are on good terms. 

All in all, hopes for stimulus are high while a split government implies low chances of tax hikes and regulation that markets dislike. The surge in stocks is weighing on the safe-haven dollar and boosting EUR/USD

2020 Elections: Markets cheer prospects of a delayed Biden victory, not a contested election

Are markets in a "buy the rumor, sell the fact" mode? The well-known phenomenon could result in profit-taking if Biden is announced the inner. 

Apart from waiting for the results, markets will be paying attention to the Federal Reserve's decision later in the day. The Fed is set to leave its policy unchanged after pledging to leave interest rates low at least through 2022. 

See Fed Preview: Powell set to convey cautiously optimistic message, unless he has depressing NFP data

Ahead of the Fed, weekly US jobless claims are projected to extend their gradual decline. On Wednesday, ADP's private-sector labor data showed an increase of 365,000 positions, fewer than expected. The ISM Services PMI pointed to ongoing growth, but the employment component fell, implying weaker hiring trends. 

The figures come ahead of Friday's Nonfarm Payrolls statistics for October. The ongoing elections are overshadowing the Fed and the NFP in a historic week. 

In Europe, coronavirus cases continue rising, with Germany surpassing the 20,000 marks. No new lockdowns are discussed for now, but the lack of improvement could result in new tough decisions for governments across the continent. COVID-19 has been off the radar in recent days and could return with a vengeance once the dust settles from the elections. 

All in all, there is room for more upside before a potential change of mood. 

EUR/USD Technical Analysis

Euro/dollar enjoys upside momentum on the four-hour chart and the Relative Strength Index is still under 70 – thus outside the overbought territory. On its way up, the currency pair surged above the 50, 100, and 200 Simple Moving Averages. 

The next level to watch is 1.1840, which capped a recovery attempt last week. IT is followed by 1.1865 and 1.1880. 

Some support awaits at 1.1790, which was a support line last week. It is followed by 1.1170, a high point earlier this week. The next levels to watch are 1.1720 and 1.17.

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.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD: Golden cross confirms more upside for aussie bulls, 0.7100 eyed

AUD/USD: Golden cross confirms more upside for aussie bulls, 0.7100 eyed

A bearish Double Distribution day could bring more offers to the asset. A golden cross, represented by 50- and 200-period EMAs advocates the antipodean. Aussie bulls may find a responsive buying action at the lower boundary of the Rising Channel.

AUD/USD News

EUR/USD skids to near 1.0550 as risk-on impulse fades, Eurozone data eyed

EUR/USD skids to near 1.0550 as risk-on impulse fades, Eurozone data eyed

The EUR/USD pair has witnessed a minor fall after breaching the early Asian session’s consolidation formed in a narrow range of 1.0579-1.0588 as the risk-off impulse rebounded. The asset has slipped to near 1.0550 and is expected to remain uncertain.

EUR/USD News

Gold bulls recapture 200-DMA, more gains likely? Premium

Gold bulls recapture 200-DMA, more gains likely?

Gold Price is headed for the first weekly gain in five weeks this Friday, despite posting small losses, in the wake of a sharp rebound in the US dollar. The dollar recovers its ground even though risk sentiment remains in a fairly better spot, with the S&P 500 futures up 0.65% on the day. 

Gold News

How to trade the next 20% upswing in Binance Coin price

How to trade the next 20% upswing in Binance Coin price

Binance Coin price is on a recovery rally and shows promise of a further uptrend. Adding credence to this run-up is the price inefficiency that is likely to propel BNB higher. Binance Coin price crashed to $205 on May 13 as the crypto markets crumbled due to the LUNA-UST debacle.

Read more

Tesla regains $700 despite cut from S&P 500 ESG Index

Tesla regains $700 despite cut from S&P 500 ESG Index

Tesla's stock slips as it is kicked out of the S&P 500 ESG index. Elon Musk reacts aggressively, calling it a scam. Growth fears dominated and weighed on the overall market mood, leading to a negative close on major Wall Street indices. 

Read more

Majors

Cryptocurrencies

Signatures