05.11.202012:20 Forex Analysis & Reviews: Overview of the EUR/USD currency pair on November 5, 2020

As expected, the election of the President of the United States of America was a heated battle between the current President Donald Trump and the Democratic candidate Joe Biden. At the moment, Biden has 264 electors across the states, while Trump has only 214. However, there are still undecided states where it is likely to vote for Trump. In general, the situation in the United States is quite acute and even explosive. Mass protests that will turn into riots and pogroms are not excluded. If you think that ordinary Americans have a huge number of weapons in their hands, the picture is even more frightening. So far, both candidates are swaggering and convincing everyone of their victory. One of the most important points is the fruitful cooperation of the White House administration with Congress, and it is likely to be Democratic. So far, there are 204 Democrats in the House of Representatives, and only 190 Republicans. There is equality in the Senate, both Republicans and Democrats have 48 representatives. But now it is too early to sum up any results, and the voting results may be delayed until the end of this week. For Trump, the victory in Texas is very important, as a result of which he will win 38 electoral votes. In general, the opinions of all kinds of political scientists and analysts are radically opposite. Indeed, the current results of the vote clearly show that American society is divided into two camps, which are already quite hostile to each other.

Today, the markets will be influenced by summarizing the results of the presidential elections in the United States. From the macroeconomic events for the EUR/USD pair, you can and should highlight the initial applications for unemployment benefits and the results of the extended meeting of the US Federal Reserve System (FRS). Since the new stimulus program was not adopted before the election, I think the rhetoric of the head of the Federal Reserve Jerome Powell will be very neutral and will not have a significant impact on the price dynamics of the US dollar. I believe that at a time when it is still unknown who will win the election and what the volume of the new simulation program will be, it is unwise to make any changes to the Fed's monetary policy.

Daily

Assumptions about the nervousness of market participants and sharp multidirectional movements of the US currency could not be better confirmed during the trading of the previous two days. This is more than eloquently indicated by the last daily candles since November 3. At yesterday's trading session on November 4, the EUR/USD currency pair soared to 1.1770, and then fell to 1.1600, but still managed to finish trading with a slight increase, and the closing price was 1.1725. Today, the pair is growing due to investors' risk appetite. As has been repeatedly mentioned in previous materials, Biden's victory will have a short-term positive effect on stock exchanges and risk sentiment in general, in all markets.

How to trade in this situation? In my personal opinion, due to the uncertainty of both the results and the consequences of the US presidential election, it is better not to open new positions until Monday and stay out of the market. Especially since tomorrow is the last trading day of the week and American labor reports, which are impossible to predict the reaction of market participants. From a technical point of view, I would also like to remind you that the euro/dollar is in the daily cloud of the Ichimoku indicator, which is a zone of uncertainty. However, after writing the article, there are attempts to exit the pair from the cloud up. If they are successful, then it will be a little easier for us to assume the future direction of the main currency pair.