The EUR/USD currency pair reached the resistance level of 1.1886 on Friday. This level is located near the 1.1903 level, which was the upper line of the horizontal channel for a long time. Therefore, it can also offer resistance to euro buyers at this time. In general, we expect to see a downward reversal of the pair and quotes to fall to the 1.1700 level in the range between 1.1886 and 1.1903. Over the past week, the markets have traded the EUR/USD pair based on only one topic - the US elections. The results were announced this week. Joe Biden. At least the current results of the counting of votes speak for this, and the number of electoral votes received at the moment is enough to declare Biden as president. Therefore, the tension in the foreign exchange market should have slightly eased. "A little" - because this is far from the end of the whole saga of elections. It is possible that now there will be legal proceedings. Republicans and Trump will accuse the Democrats and Biden of electoral fraud, of incorrect vote count. This is power. This is the power in the country with the largest economy in the world. Donald Trump, as a businessman, will fight until the very last moment. Moreover, in the history of the United States there were precedents when, by decision of the Supreme Court, the results in a particular state were reviewed. Back in 2000, when George W. Bush became president, ahead of his rival Al Gore by 1,000 votes in the multimillion state of Florida, which brought him the election victory. Thus, purely hypothetically, the results in several states can be revised, but no one can say how the recount and the court proceedings will end. However, so far, experts are inclined to believe that Trump will not be able to revise the election results using the courts. We cannot say that the dollar fell last week due to Joe Biden's leadership. Rather, it may be due to high uncertainty and high stress. Now that everyone knows who the winner is, we believe that the US dollar will begin to regain lost positions, and therefore we are waiting for the euro/dollar pair to fall next week. At the same time, if the price manages to confidently gain a foothold above the 1.1903 level, then the upward movement may continue in this case. Unfortunately, novice traders still have neither a trend line nor a channel, it is possible to overcome it in order to determine a trend change. Therefore, the analysis is for a rebound from the 1.1903 level or for simple expectations that the pair would fall.
Novice traders will be deprived of macroeconomic information on Monday. But, we are sure that a large amount of various political information will come from America. Therefore, you will not be bored. On the other hand, it is definitely impossible to predict what kind of information this will be and what the market's reaction to it is. Therefore, you need to be ready for anything. Although, of course, we believe that the most stressful days are over. Markets should calm down in the near future, and the nature of trading should return to normal.
Possible scenarios for November 9:
1) Buy positions on the EUR/USD pair continue to be relevant. Formally. However, we advise you to consider opening new long positions if the price can confidently overcome the 1.1903 level. Also, it would be very nice if an upward trend line appears. After so much upward movement, we are more inclined towards the option that the pair's quotes would fall.
2) Trading for a fall is irrelevant at this time, despite the fact that there are more chances and probability for quotes to drop. Theoretically, novice traders can try to work out a new sell signal from MACD with targets at 1.1798 and 1.1737, but don't forget about Stop Loss, which in this case is best set above the 1.1903 level.
