The EUR/USD is bullish and eyeing 1.2000. It is official. Joe Biden has won the US election, and this is likely supporting the Euro going forward.
Legal battles are not over as current President Donald Trump will file lawsuits beginning today challenging the results. Trump also plans on re-counts in some states. In effect, the election is over, but it will take some time to get through the next hurdles until Trump either graciously concedes or is forced out. US Democrats have won the presidential race and the House Of Representatives.
If Democrats win the Senate in a run-off vote (State of Georgia) January 5th, the Dollar will sink. Democrats are willing to “open the cash register” for additional fiscal stimulus which will be Dollar negative.
The coronavirus pandemic is taking a toll in the US, with positive cases over 100,000 multiple days in a row. During the FOMC meeting last week, Federal Reserve Chairman Jerome Powell said the economic recovery is fragile and more financial support is needed. The Euro is favoured due to a closer European Union 1.1 trillion budget deal; finer details are reported to be released today.
There is strong support at the 61.8% Fibonacci level of 1.18000. Above the current price, which is just under 1.19000, there is not much holding 1.20000 back. There are a few Bollinger Band levels and Pivot Points, but nothing too impeding. On the economic calendar for today, we have a stronger German Trade Balance forecasted. ECB President Christine Lagarde will speak at 0925 GMT. Certainly, all is not rosy for the Euro. The European Central Bank has expressed the need for stimulus like the United States. It appears though, the situation in the US is more dire.
The CFTC Commitments of Traders show a massive 140K EUR long positions. The next level of longs is the JPY at 28K to give you an idea of where the Euro is psychological.
EUR/USD Key levels:
Support: 1.1819, 1.1760, 1.1724
Resistance: 1.1915, 1.1951, 1.2010