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  • US dollar broadly sold-off into split Congress, doubts on Trump’s agenda.
  • Focus shifts to FOMC decision amid a lack of fresh macro drivers.

The offered tone around the US dollar keeps growing bigger, now driving the EUR/USD back to two-week highs near 1.1470 region amid a renewed sell-off in the US dollar across its main competitors.

The greenback came under aggressive selling pressure once again and hit fresh two-week highs below the 95.90 handle versus its six major rivals, after it was officially declared that the Democrats secured the needed 218 seats to gain control of the US House of Representatives while the Republicans maintained their majority in the Senate,  leaving the Congress divided.

The risk-on rally on the European equities amid a widely expected US mid-term elections outcomes further added to the weight on the safe-haven US dollar. Meanwhile, a rebound in the German industrial production for the month September also lifted the sentiment around the common-currency, offering fresh signs of recovery in the Eurozone. Germany September industrial production came in at +0.2% vs. 0.0% m/m expected.

Looking ahead, markets will assess the implications of the split Congress as the Trump’s policies going forward, which will have a significant influence on the dollar trades. In the meantime, the immediate focus is on the FOMC decision due tomorrow, as the macro calendar  today remains data-light.

EUR/USD Technical Levels

According to Haresh Menghani, FXStreet’s Analyst, “a follow-through buying beyond the key 1.1500 psychological mark will reaffirm the bullish breakout and accelerate the up-move towards 1.1545-50 intermediate resistance before the pair eventually aims towards reclaiming the 1.1600 round figure mark.   On the flip side, the contracting wedge resistance break-point, near the 1.1425 area, closely followed by the 1.1400-1.1390 region now seems to protect the immediate downside.”