Saturday 12 November 2016

EUR/USD: Far Outside The Realm Of Expectations

48 hours after the US presidential elections, investors continued to buy US dollars. No surprise to anyone that the choice of the Americans came unexpected even to themselves as the high volatility of markets continued throughout the day. Instead of negativism, Trump’s victory resulted in additional investment assets as ultimately analysts expect that choice to be positive for the US economy.
At the end of the week the euro remained highly pressured by the US dollar, pinned at new fresh 8-month low at 1.0828 and closed at 1.0852. 
From retrospective viewpoint EUR/USD dropped with around 300 pips comparing with just a week ago levels. On Wednesday early morning the pair topped at 1.30 and according to current level, makes some 450 pips drop. A huge drop. A dramatic turn. And the worst performance for the year. The downside movement for the pair seems to be favoured having in mind that now the focus is set on the Fed’s meeting next month and the divergent monetary policy outlook. The technical reading also confirm the bearish trend. RSI is indicating oversold conditions as well as the stochastic, which is showing lack of momentum.



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