EUR/USD Mid-Session Technical Analysis for November 4, 2020

The Euro is trading lower against the U.S. Dollar on Wednesday after clawing back most of its earlier losses. Volatility is extremely high in reaction to the U.S. presidential election results as predicted by options traders last week.

The early price action indicated traders were leaning toward a surprise win by Trump as prices retreated below a pair of main bottoms at 1.1622 and 1.1612. However, since reaching a low of 1.1603 overnight, the Euro has rebounded to unchanged for the session, suggesting that perhaps challenger Joe Biden is gaining in the polls.

At 16:28 GMT, the EUR/USD is trading 1.1711, down 0.0009 or -0.08%.

We’re not here to predict the outcome of the election, besides it could take weeks before we know the true winner. What we do believe, however, is that a Trump win would be bearish for the Euro and a Biden victory would be bearish for the U.S. Dollar.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend turned down when sellers took out the last main bottom at 1.1622. A trade through 1.1881 will change the main trend top up.

The main range is 1.1371 to 1.2011. Buyers are trying to establish support at its retracement zone at 1.1691 to 1.1616.

The minor range is 1.1881 to 1.1603. Its 50% level at 1.1742 is potential resistance.

The short-term range is 1.2011 to 1.1603. Its retracement zone at 1.1807 to 1.1855 is another potential upside target. This is possible resistance as well as the trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

Our work suggests that the direction of the EUR/USD on Wednesday will be determined by trader reaction to yesterday’s close at 1.1720.

Bullish Scenario

A sustained move over 1.1720 will indicate the presence of buyers. Taking out the minor pivot at the intraday high at 1.1770 will indicate the buying is getting stronger. This could trigger a surge into the short-term 50% level at 1.1807.

Overtaking 1.1807 could extend the rally into a short-term Fibonacci level at 1.1855, followed by another main top at 1.1881. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 1.1720 will signal the presence of sellers. If this create enough downside momentum then look for the selling to possibly extend into the main retracement zone at 1.1691 to 1.1616, followed by today’s intraday low at 1.1603. This is the potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.