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EUR/USD forms double-bottom as dust settles on US elections

It’s back to business after the initial storm from Trump’s Triumph. Volatility is likely to continue, but currencies are now on their own once again. While the pound remembered its Super Thursday and advanced, the euro has fewer reasons to be cheerful.

EUR/USD  almost touched 1.13 during election night, as the US dollar was sold off. It is  over 400 pips below this peak and found support. There were good reasons for the greenback comeback. 1.0850 is a strong line of support that now turns into a double-bottom. The level was last seen in October and was now challenged once again.

Further support awaits at the March low of 1.0820, followed by 1.0710. Resistance is at 1.0960 and 1.10.

Why is the euro falling? Beginning from politics, Trump’s victory follows Brexit and precedes elections in key European countries. One of the first people to congratulate Trump was Marine Le Pen, another populist, lead of  the French National Front. Geert Wilders from the Netherlands joined her and also the German Alternative für Deutschland is also lurking.

Apart from politics, the euro-zone has other issues, with very low inflation and weak growth. There are no signs this is about to change anytime soon.

See how to trade the US consumer sentiment measure with EUR/USD

Here is the EUR/USD chart:

eurusd-double-bottom-november-11-2016

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.