- EUR/USD rebounds from lows near 1.1600 on Wednesday.
- Focus is now on results in Michigan, Wisconsin and Pennsylvania.
- US ADP came in well below forecasts at 365K in October.
The shared currency regains composure and pushes EUR/USD back to the positive ground in the area past the 1.17 yardstick on Wednesday.
EUR/USD volatile on US elections results
EUR/USD regains some composure after bottoming out in monthly lows around 1.1600 during early trade along with news that President Trump was narrowing the gap vs. Democrat candidate Joe Biden.
So far, Biden keeps leading albeit by a narrow margin, with the attention now centred on votes from key states like Wisconsin, Michigan and Pennsylvania.
Earlier in the session and apart from the election’s universe, final Services PMIs in the euro area and Germany surpassed the preliminary readings for the month of October, while Producer Prices in the broader bloc rose 0.3% MoM and contracted 2.4% YoY in September.
In the NA session, the ADP report disappointed expectations at “just” 365K in October and the trade deficit shrunk to $63.90 billion in September. Later in the session, the ISM Non-Manufacturing will close the daily calendar.
What to look for around EUR
EUR/USD trades within the 1.1600-1.1770 range on elections day. In the very near-term, EUR/USD is expected to remain under scrutiny on USD-dynamics mainly coming from the elections, the FOMC gathering (Thursday) and the Nonfarm Payrolls (Friday). On the more domestic front, the euro appears propped up by auspicious results from domestic fundamentals (despite momentum appears somewhat mitigated in several regions), although the now more dovish stance from the ECB prompts some caution when comes to bullish attempts. As usual, the euro still looks supported by the solid position of the EMU’s current account.
EUR/USD levels to watch
At the moment, the pair is up 0.02% at 1.1712 and a breakout of 1.1771 (monthly high Nov.3) would target 1.1880 (monthly high Oct.21) en route to 1.1917 (high Sep.10). On the downside, the next down barrier is located at 1.1622 (monthly low Nov.2) followed by 1.1612 (monthly low Sep.25) and finally 1.1495 (monthly high Mar.9).
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