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  • Euro rises sharply after six consecutive days of losses versus the dollar.
  • EUR/USD likely to remain volatile amid uncertainty about the outcome of US elections.

The EUR/USD printed a fresh five-day high during the American session on the back of US dollar weakness. It is climbed to 1.1739 and it trades at 1.1725 on US Election Day. The DXY falling by 0.83%, trading at six-day lows under 93.40.

The improvement in market sentiment could be seen as market participants considering less likely an outcome of a disputed election that could results in a legal battle, political and social tension.  

In Wall Street, the Dow Jones gains more than 650 points, and the Nasdaq rises by 2.25%. Gold and crude oil are also higher by 0.80% and 1.95% respectively. US bond yields are rising, offering no support to the dollar.

The rally in EUR/USD continues despite the decline in EUR/GBP on risk appetite and after Reuters reported that the European Central Bank’s Pandemic Emergency Purchase Programme (PEPP) will likely remain the main instrument to increase stimulus at the next meeting.

From a technical perspective, EUR/USD holds a clear bullish tone. The immediate resistance is seen at the 1.1745 zone, followed by 1.1760. On the downside, 1.1715 is now the immediate support and then comes 1.1675 (20-hour moving average).

Volatility across financial markets will likely remain elevated. The first polls in the US will close at 6 PM ET.

Technical levels