Election uncertainty holds EUR/USD bulls at 1.0900 threshold
The 1.0800 level remains crucial support
The EUR/USD pair is hovering near 1.0880 in the early European session as today’s U.S. presidential election unfolds. Market participants are eyeing this political uncertainty as a key driver.
The dollar has been feeling the pressure and the outcome of the election could shake up the currency market. ING Bank analysts have laid out the scenarios: A Republican clean sweep might give the dollar a slight lift, but a potential Harris win could cause a sharper decline in the USD. If Trump wins but Democrats maintain control of the House, the dollar may barely move. For now, this uncertainty provides some temporary support to the euro.
EUR/USD technicals reveal critical resistance and support
Despite EUR/USD uptick today, the technical backdrop for EUR/USD remains bearish. The pair continues to struggle below the 100-day Exponential Moving Average (EMA) and has faced repeated rejections around the 1.0900 resistance zone.
Bulls attempted to break through last Friday, only to experience a sharp 0.7% drop. Monday saw another attempt fail, forming a bearish doji candlestick, hinting that sellers are still active with high volume.
Today's push higher suggests that bulls aren’t giving up easily, as they attempt once more to challenge the 1.0900 mark. If EUR/USD manages to break this level, watch for resistance at the 50-day EMA and then 1.0950 level. A solid close above these could set the stage for a run at the 1.1000 psychological barrier.
The 1.0800 level remains crucial support. If sellers regain control, a break below October low at 1.0760 could open up a path to 1.0666.
Fed Decision on the Horizon
Looking beyond the election, the next big market mover is the Federal Reserve’s interest rate decision on Wednesday. Last week’s Non-Farm Payroll report showed a cooling labour market, but context matters: recent hurricanes and the Boeing strike influenced those numbers. Still, the Fed will take note, and while a 25 basis points rate cut in November is expected, markets aren’t bracing for surprises. The Fed’s cautious approach might limit volatility, yet the election outcome could complicate future policy and determine whether Jerome Powell stays as Fed Chair.
EUR/USD has been on a recovery move since late October. EUR/USD tests 1.0900 resistance as DXY weakens ahead of election
