- EUR/USD bounced from the ascending 10-day average in Asia.
- President Trump has been impeached by the US House.
- Senate is likely to acquit Trump of all charges.
- The German economy is showing signs of bottoming out and that could restrict losses in Euro.
Dollar selling in Asia helped EUR/USD bounce up from key average support and regain some poise, although, the resistance of the 200-day MA is still intact.
Trump impeached
President Donald Trump was impeached by the US House of Representatives Wednesday night (Thursday Asia) for the abuse of power. The House also approved a second charge that Trump obstructed a Congress investigation.
The dollar came under pressure after the impeachment news hit the wires. EUR/USD bounced up from the ascending 10-day moving average support at 1.1112 an is currently trading at 1.1130, representing a 0.15% gain on the day.
The losses in the greenback have been moderate and could be reversed in Europe as the Senate, which is controlled by Trump’s Republican Party, is likely to acquit him of all charges. Put simply, the odds of Trump vacating office are low. The Senate trial is expected to begin in January.
German hope may restrict losses
The Ifo institute’s closely watched surveys for the current situation and future expectations released Wednesday showed an uptick in sentiment.
Notably, the Expectation Index rose to 93.8, up from 92.1, beating the estimate of 93.1.
With the German economy showing signs of bottoming out and heading into the New Year with more confidence, traders may be less inclined to sell Euros.
From a technical perspective, the pair is currently trading in no man’s land. A close above the 200-day average at 1.1151 is needed to revive the short-term bullish setup. On the flip side, a break below Wednesday’s low of 1.1115 would imply a short-term bearish reversal.
Technical levels
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