US midterm elections in the epicenter of attention

Peter Iosif, ACA, MBA IronFX

US elections could shake the markets

The USD continued to weaken in the FX market yesterday. The US midterm elections are in the market’s focus, as nothing less than US President Trump’s total control over the US administration is being set into doubt. Currently Republicans control both chambers of the US Congress allowing for US President Trump’s policies to pass into law, with a relative ease. Yet polls seem to show that the Democrats may be able to flip one if not both Chambers of Congress. Thus, the high stakes are also accompanied by high uncertainty about the outcome, making the elections an explosive mix for the markets.

US tech shares continue to lose ground

US tech shares continued to slide lower as market worries for the amount of investment required for AI development are maintained. Should the market worries intensify we may see tech shares continuing to slide lower and vice versa. Apple’s EPS and revenue figures reported, were higher than expected, yet the company’s share price dropped later on. Palantir’s share price seems to be supported as it also outperformed market expectations with its earnings report. Anthropic has amended its S-1 investor prospectus raising its revenue figure, which could intensify market interest in its upcoming IPO, boosting its price.

Oil prices correct higher as the market hesitates

Oil prices corrected higher in today’s Asian session as market hopes for a possible Qatari diplomatic breakthrough in the US-Iran conflict have dimmed. The US attacked Iran's Qeshm Island, while Iranian officials stated that the two sides are still far from reaching a deal that could end the conflict. A possible intensification of the market’s worries could lift oil prices and vice versa.

Other highlights for today

In today’s American session, we note that ECB Board Member is scheduled to speak, while in the US we get the factory orders and JOLTS job openings figure for September, the weekly API crude oil inventories figure, while later on we get New Zealand’s Q3 employment data. In tomorrow’s Asian session, we get Australia’s Final Composite PMI figure for October, Australia’s Household spending for September and in the European session, we get the Czech Republic’s preliminary CPI rates for October, Euro Zone’s and the UK’s final Services and composite PMI figures for October, Euro Zone’s Preliminary HICP rates for October, while in Sweden Riksbank is expected to hike rates.

Charts to keep an eye out

Given the US elections on a technical level, we keep a close eye on Gold’s chart. XAU/USD’s price seemed to stabilise just below the 3960 (R1) resistance line. We maintain our bearish outlook for the precious metal’s price, as long as the downward trendline guiding it remains intact. The RSI indicator remains at low levels, just above 30, implying a strong bearish market sentiment for gold’s price. Should the bears maintain control over the index, we may see it aiming for the 3600 (S1) line. Should the bulls take over, we may see gold’s price rising above the 3960 (R1) resistance line, continue to break the prementioned downward trendline ending the downward motion, and continuing higher aiming if not breaching the 4275 (R2) resistance level.

Nasdaq’s price action continued to drop aiming for the 27050 (S1) support line. We maintain our bearish outlook for the index given also that the RSI indicator has reached the reading of 30 implying a strong bearish market sentiment for the index. Should the bears remain in charge of the index’s direction, we may see Nasdaq reaching if not breaching the 27050 (S1) support line. Should the bulls take control, we may see Nasdaq reversing the losses of the past three session, breaking the 28570 (R1) resistance line and aim for the 29735 (R2) resistance level.

Calendar follows

XAU/USD daily chart

Support: 3600 (S1), 3250 (S2), 2950 (S3).
Resistance: 3960 (R1), 4275 (R2), 4550 (R3).

US 100 Cash daily chart

Support: 27050 (S1), 25375 (S2), 23965 (S3).
Resistance: 28570 (R1), 29375 (R2), 30770 (R3).

Author

Peter Iosif, ACA, MBA

IronFX

Mr. Iosif joined IronFX in 2017 as part of the sales force. His high level of competence and expertise enabled him to climb up the company ladder quickly and move to the IronFX Strategy team as a Research Analyst. Mr.

AUD/USD drops to two-week low, further below 0.7000 after RBA's less hawkish rate hike

AUD/USD drifts lower for the second straight day on Tuesday, hitting a fresh two-week low during the Asian session after the Reserve Bank of Australia's (RBA) widely expected 25 bps rate hike. The decision was far from unanimous, with three members preferring to hold rates at 4.60%. This tempers expectations of further tightening, which, along with modest US Dollar strength, weighs on the currency pair.

USD/JPY fails near 159.00 amid weak USD, intervention risks

USD/JPY edges lower during Tuesday’s Asian session, reversing part of the previous day's gains to 158.00 as the US Dollar remains depressed amid hopes for Iran diplomacy and ahead of US midterm elections. Meanwhile, intervention risks support the Japanese Yen, though the uncertainty over the timing of the next BoJ rate hike caps gains. This keeps the pair confined within a familiar range and warrants caution before placing directional bets.

Gold slides below $3,900 as Fed hike bets counter softer USD ahead of US elections

Gold slides below the $3,900 mark during the first half of the European session, eyeing its lowest level since October 2025, set last week amid expectations of further tightening by the US Federal Reserve. Data released on Monday showed that US manufacturing sector business activity expanded for the 10th consecutive month in October. The Institute for Supply Management's Manufacturing PMI came in higher than consensus estimates and rose to 55.5 in October from 54.5 in the previous month.

Cardano extends losses as sellers stay in control

Cardano (ADA) extends correction, trading below $0.189 on Tuesday after losing key support zone the previous day. Mixed derivatives data and cautious on-chain metrics continue to weigh on bullish sentiment, while weakening technical indicators suggest further downside risks for ADA.

BoE is set to hike rates this week: Warns against 'unwarranted' aggressive tightening

We see a hike as a done deal this week and another, while not yet our baseline scenario, is possible in February should inflation stay above 4%, commodity prices remain high and activity remain resilient. We remain of the view, however, that aggressive tightening is unwarranted, for four main reasons: There are no clear signs of second-round inflation effects, nor do we think that there will be.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.