US DOLLAR FALLS AFTER MIXED MID-TERM ELECTION RESULTS

The US dollar fell against most currencies after the mid-term results were announced. As expected, Democrats won back the house while Republicans extended their majority in the Senate. The new development means that Donald Trump will have a difficult period in the next two years. This is because it will face increased scrutiny from the Democrats in the house. He will also face increased legal problems while having nothing passed in Congress. The only silver lining is in appointments which will sail through in the Senate.

The kiwi extended the gains started on October 9. This was after data from the country showed improved employment numbers in the second quarter. The unemployment rate dropped to 3.9%, which was better than the 4.4% that traders were expecting. It was also better than the 4.5% unemployment rate in the second quarter. The participation rate improved to 71.1% in the third quarter from the expected 70.9% while the employment change rose by 1.1%. This was higher than the 0.5% that traders were expecting.

The sterling rose against the US dollar. This was mostly because of the election results from the United States. Data from the country showed that housing data was doing well. The Halifax house price index rose by a monthly rate of 0.7%. This was higher than the 0.3% that traders were expecting. On an annualized basis, the index rose by 1.5%. The consensus estimate was 1.2%. Meanwhile, in the EU, German Industrial production rose by 0.2%, which was higher than the consensus estimates of 0.1%.

EUR/USD

The EUR/USD pair moved up today after the mid-term elections. It reached an intraday high of 1.1500, which was an important resistance level. It was also near the 61.8% Fibonacci Retracement level. The double EMA shows that the pair will likely continue the upward momentum. This is confirmed by the momentum indicator which is currently above 100 and the money flow index, which is an RSI that factors volume, is near 70.

GBP/USD

The GBP/USD pair continued the upward momentum started on October 31. The pair reached an intraday high of 1.3175. This was the highest level since October 17. The price is along the upper band of the Bollinger Bands, which is a sign that the pair could continue moving up. This is confirmed by the momentum indicator. If the pair continues moving up, it will likely test the important resistance level of 1.3250. Therefore, at this stage, the trend is likely your friend.

USD/JPY

The USD/JPY pair continued the upward trend started March 21 this year. The pair reached an intraday high of 113.84. On the daily chart, the pair’s moving averages show that it will likely continue the upward trend. The RSI is currently at 54 while the Relative Vigor Index has just emerged from the oversold zone. The pair will likely continue moving higher ahead of tomorrow’s decision by the Fed.