EUR/USD Decline: How US Political Dynamics Favor a Stronger Doll

11 de nov.

The EUR/USD currency pair may experience further declines as the US Dollar (USD) benefits from renewed optimism tied to recent developments in American politics. Following substantial electoral gains by the Republicans, a robust agenda focusing on tax reforms and spending cuts is expected to gain traction, bolstering confidence in the USD.

In Europe, the European Central Bank (ECB) may contemplate reducing interest rates to nearly zero by 2025 if economic growth stagnates as a result of tariffs imposed by the Trump administration.

Current price action indicates that after testing the 1.0800 level, the Euro has sharply dropped, continuing its depreciation against the strengthening USD, which has gained support from the positive sentiment surrounding the Republican victory. The Stochastic indicator clearly shows that the DXY is moving out of oversold territory, suggesting further strength ahead for the Dollar.

Additionally, the latest Commitment of Traders (COT) report reveals an increase in long positions among retail traders, while institutional investors—often referred to as smart money—have begun to reduce their long holdings. This shift may signal a potential downturn ahead for the Euro.

Based on our analysis, we have identified a demand zone between 1.0600 and 1.0450, which merits further examination in a weekly context for a clearer rationale behind this zone.

In summary, the outlook for the Euro and other currencies against the DXY appears bearish in the near term, given the current market dynamics and geopolitical factors at play.



Our previous Forecast with Target 1.0800 Pullback.

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12 de nov.

Trade ativo

The EUR/USD currency pair has dipped to 1.0620, marking its third consecutive day of declines. This drop is primarily driven by fears surrounding potential tariff threats from US President-elect Donald Trump, alongside heightened expectations of interest rate cuts by the European Central Bank (ECB).

As Trump prepares to assume office, concerns over trade policies are prompting investors to favor the US dollar, increasing downward pressure on the euro. Additionally, the ECB’s dovish outlook on monetary policy is contributing to the euro's weakness.

Traders should watch the pair closely as it approaches a key demand zone, which could present a potential reversal point or continue the bearish trend. With uncertainty reflected in the latest Commitment of Traders (COT) report, market participants must stay vigilant as geopolitical and monetary developments unfold.