EUR/USD - Euro-dollar might have found a floor for now around $1.07 - 11/08/2024 (GMT)

Apart from the dollar’s general strength in the aftermath of Donald Trump’s clear win, the collapse of the German coalition government has also affected the euro negatively. Markets are currently pricing in a drop to 2% for the main refinancing rate by June 2025 while Fed will probably remain about double that then according to CME FedWatch.

6 November’s drop was extremely sharp as the results of the American elections started to show a clear win for Mr Trump. As expected, $1.07 has held as a support for now but is very likely to be tested again in the next week or so. $1.07 is an important support primarily because that area was the source of the uptrend in July-August and because of the presence of the 100% monthly Fibonacci retracement. Given the fundamental outlook, it’ll probably be broken sooner or later, but how soon depends on the reaction to inflation on 13 November.

The upside seems to be quite limited in the near future. The attempt to move back above $1.08 on 7 November was rejected but if American inflation next week is lower than expected there might be a retest of the 200 SMA around $1.087.

This is my personal opinion which does not represent the opinion of Exness.