EUR/USD posts strong weekly gains ahead of US elections

The euro is about to post the second weekly gain in a row against the US dollar. It is more than 100 pips above the level it had a week ago, the highest weekly gains since mid-August. 

A weak US dollar boosted EUR/USD to the upside. Despite the FOMC statement pointing toward a rate hike and the NFP report that showed a solid labor market (job gains below expectations but positive revisions and wage growth acceleration), Greenback weakened in the currency market ahead of the US presidential election. 

The outcome of the election is likely to impact on the pair according to analysts from Danske Bank. They see EUR/USD at 1.13-1.14 within a few day if Donald Trump wins the election; if he losses they see EUR/USD heading lower after the election and then higher during 2017. 

EUR/USD levels 

Today the pair gained ground during the American session. It climbed to test weekly highs that lie around 1.1125 but if failed to break higher. 

The 1.1125 zone, that is where the 20-week moving average stands become an important short-term resistance. Above here the next key resistance might be 1.1200/05 (psychological) and 1.1250 (Sep 29 & 30 high). On the downside, the area around 1.1050 is again a relevant support followed by 1.0930/35 (Oct 31 low). 

To learn more about this topic, check our video analysis.