EUR/USD buyers poised to try and build more upside momentum
The risk moves over the past few days certainly has the suggestion that the market is starting to grow more comfortable about a ‘blue sweep’ and price action today continues to support that narrative for the most part.
US futures are keeping higher on the day once again, with the S&P 500 having yesterday broken through key short-term resistance at 3,428.
And the dollar is weaker across the board once again amid the more optimistic sentiment, with EUR/USD now pretty much erasing its drop from Tuesday.
There were some concerns yesterday as the pair fell to a low near 1.1730 but the 200-hour MA (blue line) and near-term trendline support held the drop.
Since then, buyers are showing more conviction and we’re seeing that translate to a push towards 1.1800 now – where the upside move stalled earlier this week.
The 1.1790-00 region is key for EUR/USD at the moment, as a break higher will likely trigger stops on the way up and lead to further gains in the coming sessions.
Considering the market focus right now, it is all about US stimulus talks and the election for the pair with the dollar side of the equation the dominant half now.
As long as Trump still wants to try and talk something out – even if Democrats aren’t going to budge – and odds of a ‘blue sweep’ stay the way they are, it seems that the market is starting to come around to the idea that that is a risk positive outcome.
But there’s still a little over three weeks to go before election day, so there’s plenty of room for some twists and turns along the way.