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FOREX: USD Index Consolidating 1.65% Advance Following US Election

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  • The substantial victory for Donald Trump in the US election has prompted a surge of greenback strength. The USD index is currently 1.65% higher on the session, and the most notable underperformers are the Euro and the Japanese yen, reacting to the significant hawkish repricing in US rates.
  • Today's EURUSD (-1.78%) slide is the largest since the onset of COVID, and the pickup in downside momentum has resulted in a break of a long-held trendline support drawn off the October '23 low (crossing at 1.0774 today).
  • Below here, attention turns to 1.0666, the June 26 low and a key support. Protracted weakness would place focus on 1.0611, the 38.2% retracement of the Sep ‘22 - Jul ‘23 bull cycle.
  • The USDJPY trend needle continues to point north, and today’s rally reinforces current conditions. The pair has extended above 153.88, the Oct 28 high, to highlight a resumption of the uptrend.
  • A continuation higher would open 155.27, a Fibonacci projection. This level matches closely to the July 30 high of 155.22, a level traded one day prior to the BOJ hike and ensuing sharp move lower for USDJPY across early August.
  • Central bank’s headline the G10 calendar on Thursday, with the Riksbank, Norges Bank, the BOE and the Fed all deciding on rates. The FOMC is on course to cut the Fed funds rate by 25bp as it takes another step in paring back restraint.
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  • The substantial victory for Donald Trump in the US election has prompted a surge of greenback strength. The USD index is currently 1.65% higher on the session, and the most notable underperformers are the Euro and the Japanese yen, reacting to the significant hawkish repricing in US rates.
  • Today's EURUSD (-1.78%) slide is the largest since the onset of COVID, and the pickup in downside momentum has resulted in a break of a long-held trendline support drawn off the October '23 low (crossing at 1.0774 today).
  • Below here, attention turns to 1.0666, the June 26 low and a key support. Protracted weakness would place focus on 1.0611, the 38.2% retracement of the Sep ‘22 - Jul ‘23 bull cycle.
  • The USDJPY trend needle continues to point north, and today’s rally reinforces current conditions. The pair has extended above 153.88, the Oct 28 high, to highlight a resumption of the uptrend.
  • A continuation higher would open 155.27, a Fibonacci projection. This level matches closely to the July 30 high of 155.22, a level traded one day prior to the BOJ hike and ensuing sharp move lower for USDJPY across early August.
  • Central bank’s headline the G10 calendar on Thursday, with the Riksbank, Norges Bank, the BOE and the Fed all deciding on rates. The FOMC is on course to cut the Fed funds rate by 25bp as it takes another step in paring back restraint.