It’s back to business after the initial storm from Trump’s Triumph. Volatility is likely to continue, but currencies are now on their own once again. While the pound remembered its Super Thursday and advanced, the euro has fewer reasons to be cheerful.
EUR/USD almost touched 1.13 during election night, as the US dollar was sold off. It is over 400 pips below this peak and found support. There were good reasons for the greenback comeback. 1.0850 is a strong line of support that now turns into a double-bottom. The level was last seen in October and was now challenged once again.
Further support awaits at the March low of 1.0820, followed by 1.0710. Resistance is at 1.0960 and 1.10.
Why is the euro falling? Beginning from politics, Trump’s victory follows Brexit and precedes elections in key European countries. One of the first people to congratulate Trump was Marine Le Pen, another populist, lead of the French National Front. Geert Wilders from the Netherlands joined her and also the German Alternative für Deutschland is also lurking.
Apart from politics, the euro-zone has other issues, with very low inflation and weak growth. There are no signs this is about to change anytime soon.
See how to trade the US consumer sentiment measure with EUR/USD
Here is the EUR/USD chart:
