- EUR / USD bounces from lows near 1.1600 on Wednesday.
- The focus is now on the results in Michigan, Wisconsin and Pennsylvania.
- The US ADP was well below the 365,000 forecast in October.
The shared currency regains its composure and pushes the EUR/USD back to positive territory in the zone above the 1.17 level on Wednesday.
EUR / USD volatile by US election results
EUR / USD regains some composure after bottoming out at monthly lows around 1.1600 during early trading alongside news that President Trump was narrowing the gap against Democratic candidate Joe Biden.
So far, Biden continues to lead albeit by a narrow margin, with the focus now focused on votes from key states like Wisconsin, Michigan and Pennsylvania.
Earlier in the session and apart from the elections, final services PMIs in the euro area and Germany surpassed preliminary readings for October, while producer prices in the broader bloc rose 0.3% month-on-month and fell they contracted 2.4% year-on-year in September.
In the American session, the ADP report disappointed expectations with “only” 365,000 in October and the trade deficit narrowed to $ 63.90 billion in September. Later in the session, the non-manufacturing ISM will close the daily calendar.
What to look for around EUR
EUR / USD is trading within the range of 1.1600 to 1.1770 on Election Day. In the very short term, EUR / USD is expected to remain under scrutiny on USD dynamics, mainly due to the elections, the FOMC meeting (Thursday), and non-farm payrolls (Friday). On the more domestic front, the euro appears underpinned by auspicious results from domestic fundamentals (although momentum appears somewhat mitigated in several regions), although the now more dovish stance of the ECB suggests some caution when it comes to bullish attempts. As usual, the euro still seems supported by the strong position of the EMU current account.
Technical levels
At the moment, the pair is up 0.02% to 1.1712 and a breakout of 1.1771 (November 3 monthly high) would target 1.1880 (October 21 monthly high) en route to 1.1917 (September 10 high). On the negative side, the next downward barrier is located at 1.1622 (monthly minimum of November 2) followed by 1.1612 (monthly minimum of September 25) and finally 1.1495 (monthly maximum of March 9).
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Credits: Forex Street
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