EUR/USD – Wild, Wild Ride for Euro as Trump Wins Stunning Victory

EUR/USD is showing gains on Wednesday, in a session marked by sharp volatility. Currently, the pair is trading at the 1.11 line. The pair has taken traders on a roller-coaster ride, surging as high as the 1.13 line, before sharply reversing directions and dropping below the 1.11 level. The volatility is in reaction to the shocking news early Wednesday that Donald Trump has won the US presidential election. Trump garnered 276 electoral votes, beating Hillary Clinton who won 218 electoral votes. On the economic front, there are no Eurozone economic releases. On Thursday, the US will publish unemployment claims, with the estimate standing at 267 thousand.

With global markets in shock after Donald Trump’s election victory, EUR/USD remains unsettled. The US dollar plunged in the Asian session after news that Trump was on his way to victory, as EUR/USD jumped over 300 points. However, the dollar has bounced back in the European session, recovering most of these losses. As Clinton was widely expected to cruise to the White House (a Reuters release on Monday said that Clinton had a 90 percent  chance of winning), the equity and currency markets are in turmoil as the unthinkable has become reality. Trump’s victory speech was diplomatic and conciliatory, helping the markets to start to settle down after a tumultuous Asian session.

The news of a Trump electoral victory also shook up the odds of a December rate hike by the Federal Reserve. The odds dropped as low as 40 percent earlier in the day, but have recovered and actually increased. Currently, the markets have priced in at quarter-point hike at 76 percent, up from 71 percent just prior to the election. We could see further movement in the odds in the aftermath of the Trump victory, but it’s looking quite positive for a rate hike, which would mark the first rate move by the Fed since last December.

 

EUR/USD Fundamentals

Wednesday (November 9)

  • 10:00 EU Economic Forecasts
  • 15:00 US Final Wholesale Inventories. Estimate 0.2%
  • 15:30 US Crude Oil Inventories. Estimate 1.3M
  • 18:01 US 10-year Bond Auction

Thursday (November 10)

  • 13:30 US Unemployment Claims. Estimate 267K

*All release times are EDT

* Key events are in bold

EUR/USD for Wednesday, November 9, 2016

EUR/USD November 9 at 11:10 GMT

Open: 1.1018 High: 1.1299 Low: 1.0988 Close: 1.1095

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0821 1.0957 1.1054 1.1150 1.1278 1.1366
  • EUR/USD posted sharp gains in the Asian session, breaking through two resistance lines. However, the pair has given up most of these losses in the European session
  • 1.1054 is providing support
  • 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 is unchanged in the Wednesday session, despite huge movement in EUR/USD. Currently, short positions have a majority (55%), 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.