The US Election is upon us today and all the focus will be on the results from early tomorrow morning. Forex traders will be watching carefully to get a clue as to the next direction. We could see violent swings as the results of each State are broadcast. Keep your risk small and try and not over trade!
Dean's Daily FX Update – 08 November 2016
In the Zone
- AUDUSD
- NZDUSD
Noteworthy News
- The Final Polls have Hillary Clinton leading Donald Trump by an average of around 3 percentage points. The reason that the market is jittery is because the media are traditionally Democrat biased, historically they overstate the Democrats by about 5%, and you do the math! This race is far from a sure thing – Florida and North Carolina will be the key states to watch. If the Republicans win those, then its game on!
Recap
The bulk of the moves were in the London and Asian session yesterday after news that the FBI had cleared Hillary Clinton of any wrong doing. The USD and the Equity markets got a massive boost and clawed back a lot of the losses from last week.
There will be nothing else that matters in the next 24 hours other than the US Election and the market will be waiting on any early signs of the result. For those of you that are going to be interested, keep an eye on results from Florida and North Carolina – the Republicans need to win these states to have a chance.
The EURUSD traded down to 1.1025 late last night but found some staunch support down there. This pair may hover around this support level until the election result and then launch an assault. GBPUSD was a little bit more pronounced as it traded lower by over 100 pips, the pair was probably playing a little bit of catch up after BOE Governor Carneys hawkish stance last week, like the EUR though cable has found a little bit of support at 1.2375 and we could see liquidity dry up a little bit.
The USDJPY was unable to trade higher yesterday which in itself paints a picture that the market is not entirely certain of what the polls were reporting. The pair went into its shell yesterday and traded in a tight range of 104.40 – 104.60, I would expect that price may stay in that range until the results early tomorrow morning.
The USDCHF also saw little action yesterday, I would expect most traders to stay out of this pair though regardless of the elections results. The SNB (Swiss National Bank) confirmed that are prepared to intervene the in FX markets in extreme volatility. A trader would have to be very brave to get involved in this pair considering that statement.
I will be sitting on the side-lines today, I am predominately a technical trader and on days like this the technicals rarely mean much. Part of my risk management is to not be in the market when we have massive event risk. It doesn’t mean that I won’t be a very active spectator though, I will make up a quick video at about 21:00 tonight to see if the market is telling us anything.
Daily FX Ranges
EURUSD
Resistance 1.1075 – 1.1100
Support 1.1020 – 1.1007
GBPUSD
Resistance 1.2450 – 1.2485
Support 1.2380 – 1.2351
AUDUSD
Resistance 0.7705 – 0.7720
Support 0.7674 – 0.7660
NZDUSD
Resistance 0.7340 – 0.7355
Support 0.7303 – 0.7280
USDCAD
Resistance 1.3406 – 1.3418
Support 1.3370 – 1.3360
USDJPY
Resistance 104.55 – 104.80
Support 103.70 – 103.44
USDCHF
Resistance 0.9769 – 0.9782
Support 0.9716 – 0.9700
USDZAR
Resistance 13.5236 – 13.6000
Support 13.3710 – 13.3200
Important Economic Data out today
- 11:30 GBP Manufacturing Production
- ALL DAY USD Presidential Election
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