EURUSD: Biden only needs to win two states to become president

Trading 04 Nov 2020 Donner votre avis

The euro is steadily gaining strength after the morning shocks when market participants realized that public opinion polls once again have nothing to do with the reality that is happening. Even before the start of voting, all polls indicated that the victory will go to Joe Biden, and Trump's job as President of the United States was numbered.

As for the technical picture of the EURUSD pair, volatility will continue to remain at a fairly high level, and the prospects for further movement of the trading instrument will be determined by going beyond significant support and resistance levels. Special attention should be paid to the maximum of 1.1765, the breakout of which will provide buyers of risky assets with a direct road to the resistance area of 1.1840 and 1.1915. If the bears turn out to be stronger, then a break of the lower border at the base of the 16th figure will bring the European currency down to the lows of 1.1540 and 1.1430, which will only be the beginning of a new bear market that has been asking for the euro for quite a long time.

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At the last count, which has not yet been completed, the survey results were ridiculously inadequate. We are talking about those states where everything pointed to an unconditional victory for Biden, and as a result, the majority voted for Trump. Several political experts note that now the outcome of the vote is decided in the industrial states of the north and Nevada.

The more uncertainty, the more it supports the US dollar. Even in the morning, the victory of Donald Trump in Florida and Texas confused "all the cards", as it is already clear that the Democrats will most likely not achieve a complete victory, and the Senate will remain under the control of the Republicans. Donald Trump has already claimed fraud with the counting of votes by mail and demanded to suspend their processing. Also, Trump has already declared himself the winner in Georgia, Pennsylvania, and North Carolina, where official results have not yet been published.

Several political analysts note that the victory of one of the key candidates for the US presidency will directly depend on the vote count in Georgia, Wisconsin, Michigan, and Pennsylvania. Joe Biden only needs to win two of these states to win the race.

In the meantime, the market froze in anticipation of news, the European currency again began to gain ground against the US dollar and significantly strengthened, playing back most of the morning's fall, when investors began to close long positions in one fell swoop.

Now, when Trump begins to play a tricky game of fraud and challenging the yet-to-be-published results, feeling that his place is about to be taken away, traders have again begun to look at risky assets, which leads to the strengthening of the EURUSD and GBPUSD pairs. The last word was played by today's data on activity in the Eurozone services sector, which coincided with the preliminary value, but declined in October. Many experts expected a larger drop in the indicator, thus, the report did not put any serious pressure on the euro. It is likely that further deterioration in the health situation and the resumption of restrictions will continue to put pressure on the indicator. The main pressure on the sector is also associated with a slowdown in the activity and a reduction in new orders.

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The statistics agency Markit indicated that the PMI for the Eurozone services sector fell from 48 points in September to 46.9 points in October this year. Even in the Eurozone's largest economy, Germany, the index has slipped below 50 points, signaling a contraction in the activity. The report showed that the PMI for the services sector in October was 49.5 points against 50.6 points in September. The Italian PMI index in October fell to 46.7 points against 48.8 points in September.

Another indicator that reveals the rate of economic recovery in the Eurozone has declined, which indicates a very poor winter outlook for the end of 2020 and the beginning of 2021. According to the data, the index of economic recovery in the Eurozone for the week of October 12 to 18 decreased due to the deterioration of the subindexes of consumption, mobility, and overall health. The sharp increase in the incidence of COVID-19 and the quarantine measures that have been in effect since the beginning of November this year are the reason for the decline in the indicator.

The material has been provided by InstaForex Company - www.instaforex.com

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