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EUR/USD: Seeing bear-to-bull trend change on projections of split US Congress

  • The USD is on the defensive as the US Congress is heading for a split as expected.
  • The EUR/USD witnessed a falling wedge breakout in Asia.
  • Risk-on in equities could help the EUR confirm the bull breakout on a daily closing basis.
The EUR/USD printed a two-week high of 1.1471 in Asia and was last seen trading at 1.1460 - up 0.30 percent higher on the day.

The American dollar was offered in Asia on fears of split Congress in the US.

As per the latest reports, the Democrats are set to take a big majority in the House and the Republicans are set to retain control of the Senate.

A Democratic-controlled House paired with a Republican-controlled Senate means President Trump and the GOP may have a hard time enacting new legislation if any. More importantly, a Democratic House may pursue investigations into Trump's Russian ties, triggering political uncertainty in Washington. This could complicate matters for the Fed.

Hence, the greenback may continue to lose altitude in Europe.  

Further, the JPY crosses are signaling risk-on in equities, which is good news for the EUR and commodity dollars like the AUD, NZD, and CAD.

All-in-all, the pair is likely to confirm a falling wedge breakout - a bearish-to-bullish trend change on a daily closing basis.

EUR/USD Technical Levels

EUR/USD

Overview:
    Last Price: 1.1467
    Daily change: 49 pips
    Daily change: 0.429%
    Daily Open: 1.1418
Trends:
    Daily SMA20: 1.1453
    Daily SMA50: 1.1557
    Daily SMA100: 1.1586
    Daily SMA200: 1.1857
Levels:
    Daily High: 1.1438
    Daily Low: 1.1392
    Weekly High: 1.1456
    Weekly Low: 1.1302
    Monthly High: 1.1625
    Monthly Low: 1.1302
    Daily Fibonacci 38.2%: 1.142
    Daily Fibonacci 61.8%: 1.1409
    Daily Pivot Point S1: 1.1394
    Daily Pivot Point S2: 1.1369
    Daily Pivot Point S3: 1.1347
    Daily Pivot Point R1: 1.144
    Daily Pivot Point R2: 1.1462
    Daily Pivot Point R3: 1.1487