US election indecision leaves Euro and Pound negative (EURUSD and GBPUSD forecasts)

  • A stronger US Dollar theme so far in the wake of US election results as they are still coming in, with the outcome still too close to call.
  • This has likely reflected a “flight to quality”, with investors and traders looking for “safe havens”, given the threat of a disputed election result.
  • This US Dollar strength leaves both the EURUSD and GBPUSD forex rates vulnerable to losses, which we look at here.

EURUSD day trade outlook: Bear forces

An erratic Tuesday-Wednesday theme with a spike above resistance at 1.1758, then a failure back from below 1.1788, from 1.1771, to push below the key 1.1611 swing low from September, to reinforce the late October sell-off through key flagged support at 1.1687 (to shift the intermediate-term outlook to bearish), to keep the bias to the downside Wednesday.

Day trade setup

  • We see a downside bias for 1.1630 and 1.1601; a break here aims for 1.1580 and maybe towards 1.1539.
  • But above 1.1704 opens risk up to 1.1771, maybe 1.1788.

EURUSD intermediate-term outlook

The end of October push below 1.1687 signalled an intermediate-term shift to a bear trend.

  • Downside risks: We see an intermediate-term bear trend to aim for 1.1539, 1.1369 and maybe 1.1166.
  • What changes this? Above 1.1881 shifts the intermediate-term bear trend straight to an intermediate-term bull trend.
8 Hour EURUSD Chart
8 Hour EURUSD Chart

GBPUSD day trade outlook: Downside risks, despite spike higher

A Tuesday-Wednesday spike higher above 1.3122 resistance but capped by and recoiling back lower from below the key 1.3177 peak, down from 1.3140, to sustain negative pressures from the latter October pushdown through 1.2916/10 and the up trend line from latter September, to keep the threat lower for Wednesday.

Day trade setup

  • We see a downside bias for 1.2921 and 1.2854/45; a break here maybe aims for 1.2819/05, then maybe for 1.2774.
  • But above 1.3055 opens risk up to 1.3140 and possibly towards 1.3177.

GBPUSD intermediate-term outlook

The early October push above 1.3007 signalled an intermediate-term shift to a range, seen as 1.3239 to 1.2687/75.

  • Upside risks: Above 1.3239 sets an intermediate-term bull trend to aim for 1.3359, 1.3486/1.3515 and maybe 1.3711.
  • Downside risks: Below 1.2687/75 sets an intermediate-term bear trend to aim for 1.2644, 1.2480 and maybe 1.2251.
8 Hour GBPUSD Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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