U.S. Dollar Rebounds While Traders Wait For Midterm Election Results

Key Insights

• U.S. dollar received some support after the strong pullback.
• AUD/USD pulled back below 0.6500.
• USD/JPY managed to settle back above the 146 level. 

U.S. Dollar Index Moved Above The 110 Level

U.S. Dollar Index managed to settle back above the 110 level as traders were ready to buy the U.S. dollar after the strong pullback.

Traders continue to monitor elections news, although it remains to be seen whether the market is ready for big moves ahead of tomorrow’s inflation reports, which will have a major impact on currency dynamics.

Meanwhile, Treasury yields are moving higher, providing additional support to the American currency.

EUR/USD Pulls Back After The Recent Rally

EUR/USD pulled back towards the 1.0000 level as traders took some profits off the table after the recent rally.

The euro may have reacted to the ECB Consumer Expectations Survey, but it looks that profit-taking served as the main catalyst as EUR/USD moved from 0.9730 to 1.0095 without any pullback.

GBP/USD Is Under Strong Pressure

GBP/USD has found itself under material pressure today and moved towards the 1.1400 level.

There are no important economic reports scheduled to be released in the UK today. Most likely, traders decided to reduce their long positions in GBP/USD ahead of tomorrow’s U.S. inflation reports.

In case GBP/USD manages to settle back below the 1.1400 level, it will gain additional downside momentum and head towards the support level at 1.1365.

AUD/USD Is Losing Ground As Commodity Markets Pull Back

AUD/USD declined below the 0.6500 level as commodity markets have started to move lower after yesterday’s rally.

Currently, AUD/USD is trying to settle below the support at 0.6480. In case this attempt is successful, AUD/USD will move towards the next support level at 0.6450. If AUD/USD declines below this level, it will head towards the support at the 20 EMA at 0.6415.

On the upside, the nearest resistance level for AUD/USD is located at the 50 EMA 0.6510. If AUD/USD manages to settle above the 50 EMA, it will head towards the resistance at 0.6550. A successful test of this level will push AUD/USD towards the resisance at 0.6575.

Other commodity-related currencies are also moving lower today. NZD/USD made an attempt to settle below the 0.5900 level, while USD/CAD settled near 1.3450.

USD/JPY Rebounds After Pullback

USD/JPY moved back above the 146 level after an unsuccessful attempt to settle below 145.20.

Today, USD/JPY traders focused on the general dynamics of the American currency. As the BoJ policy remains ultra-dovish, any broad rebound of the U.S. dollar will be bullish for USD/JPY.

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