EUR/USD – Euro in Holding Pattern on US Election Day

EUR/USD is showing limited movement in the Tuesday session. Currently, the pair is trading at 1.1060. Today’s highlight is the US presidential election. On the release front, German Industrial Production disappointed with a decline of 1.8%, well short of  the forecast of -0.4%. Germany’s surplus narrowed to EUR 21.3 billion, missing the forecast of EUR 23.4 billion. In the US, the key event on the schedule is JOLTS Job Openings, with the indicator expected to improve to 5.67 million.

As the largest economy in the Eurozone, German numbers serve as a bellwether of the strength of the Eurozone economy. Tuesday’s data was weaker than expected by the markets. German Industrial Production recorded its second decline in three months, while the country’s surplus slipped in September. Like the rest of the Eurozone, Germany’s inflation levels have been persistently low. We’ll get a look at CPI and WPI on Friday, with the markets expecting small gains.

After a bruising and bitter campaign, Election Day has finally arrived. US voters in their millions will flock to the polls and choose either Hillary Clinton or Donald Trump as their new president. Although polls continue to point to a tight race, Clinton appears to have the upper hand as she has an easier path to garnering the 270 electoral votes needed to claim victory. The most recent polls indicate that voters favor Clinton over Donald Trump by a margin of three to five percent. On the weekend, the Clinton campaign received a boost as the FBI announced that it had no reason to change its conclusion that Clinton should not face criminal charges in her use of private emails while she was secretary of state. There are different market scenarios depending on the actual outcome of the election, with the worst case scenario being a too-close-to-call result. If either candidate fails to deliver a decisive victory, the leadership vacuum and uncertainty surrounding the result could trigger higher volatility in the markets. However, if Clinton wins a clear victory, the US dollar could respond with broad gains. The election could also have a significant effect on monetary rate policy. Currently, the odds of a rate hike in December stands at 71.5 percent.However, if the election results trigger market volatility, the Federal Reserve could hold off from raising interest rates at its next policy meeting in December.

EUR/USD Fundamentals

Tuesday (November 8)

  • 7:00 German Industrial Production. Estimate -0.4%. Actual -1.8%
  • 7:00 German Trade Balance. Estimate 23.4B. Actual 21.3B
  • 6:45 French Government Budget Balance. Estimate -83.0B
  • 6:45 French Trade Balance. Estimate -4.1B. Actual -4.8B
  • All Day – ECOFIN Meetings
  • 11:00 US NFIB Small Business Index. Estimate 94.6
  • 15:00 US JOLTS Jobs Openings. Estimate 5.67M
  • All Day – US Presidential Election
  • All Day – Congressional Elections

*All release times are EDT

* Key events are in bold

EUR/USD for Tuesday, November 8, 2016

EUR/USD November 8 at 9:45 GMT

Open: 1.1049 High: 1.1067 Low: 1.1029 Close: 1.1055

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0821 1.0957 1.1054 1.1150 1.1278 1.1366
  • EUR/USD has shown limited movement in the European and Asian sessions
  • 1.1054 is a fluid line. Currently, the pair is a weak support line.
  • There is resistance at 1.1150

Further levels in both directions:

  • Below: 1.1054, 1.0957, 1.0821 and 1.0708
  • Above: 1.1150, 1.1278 and 1.1366
  • Current range: 1.1054 to 1.1150

OANDA’s Open Positions Ratio

EUR/USD ratio has shown slight gains in long positions. Currently, short positions have a majority (54%), indicative of trader bias towards EUR/USD breaking out and moving upwards.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.