EURUSD biased to the downside as US elections get underway
EURUSD opened the week with a down gap after closing last Friday, November 4th at a 3-week high of 1.1141. The US dollar was seen trading weaker last week and fell further after the FBI notified that it was re-opening the investigation against Hillary Clinton on new emails that had surfaced. This sent the markets into a risk aversion mode and pushed EURUSD higher as a result. However, early Monday the FBI announced that there was no new evidence against the Democratic candidate which saw the market rally, in hopes of Clinton victory.
The single currency is likely to see a lot of volatility today, especially after the US trading session opens.
According to poll results from some cities, Clinton is seen to have taken the lead. However the race to 270 electoral votes is still young and the EURUSD could only reflect the uncertainty as the day unfolds.
Besides the elections today, there are no major economic releases that could determine the intraday volatility as far as EURUSD is concerned. This means that traders should be aware of the heightened risk, especially towards to the evening and exit and opinion polls start to be released.
If there is one thing that we are certain about, then it is the fact that the markets are vouching for a Clinton victory, which exposes a large downside risk should Trump be seen taking the lead at some point today.
After close yesterday at a 4-day low of 1.0397, EURUSD is currently seen paring losses. However, this upside in EURUSD since the Asian session could be short lived. The 60-minute technical chart for EURUSD shows price currently trading at the resistance zone of 1.1050 - 1.1060. This resistance level will be the key factor today as a failure to close above this resistance could signal a down day in EURUSD.
How to trade binary
Look for price failure near 1.1060 - 1.1050 on the 60-minute chart. A bearish reversal here within the next hour or two could infer that EURUSD could be seen heading lower towards 1.1000 - 1.0980.
Therefore, PUT options on EURUSD at a strike price of 1.1060 – 1.1050 is ideal, with the option contract expiry time at 21:00 GMT today.
The PUT option trade idea will be invalidated if EURUSD makes a break above the rising trend line connecting the lows of 1.0894 from 28th October and 1.0936 from October 31st.
Expiry time: 21:00 GMT