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Pres. Trump blazed through the Presidential election and a new era begins. With control of the Senate and the House still up but leaning to the GOP too, the door is wide open for the administration for deregulation, smaller government, lower taxes. The theme is to grow the economy through the private sector with fingers crossed that the deficits are reduced in the process. There will be a reallocation of jobs. There will be people leaving the country. There will be tarriffs. How that and more works itself out as the spaghetti gets shuffled around the plate is unknown, but the mandate is there..
My wish is “go at it” but stop the rhetoric and vitriol. I am too old. I am tired. Unite.
Meanwhile, buckle up.
Yields are higher with the 10-year up 16.3 basis points. Stocks are sharply higher with the S&P up 2.32%, and the Nasdaq up 1.73%.
The good news is the prices moved, the pictures (charts) show the reaction and traders focused on risk, can find risk-defining levels to get through the uncertainty. The process remains the same… technically.
EURUSD: The EURUSD moved higher before the results started to trickle in. The price moved up to test the 100-day MA and the 38.2% of the move down from the September high. The price moved lower, first breaking below the 200 day MA at 1.08687 and then the 100-bar MA on the 4-hour chart at 1.08403. That opened the door for more selling with the lows from the last few weeks and swing area between 1.0760 to 1.07767. The selling continued with the price rebounding back to the high of the swing area in the process, but selling resumed. The price moved lower again and trades near the lows. Those lows are near the triple bottom from mid to late June between 1.0665 to 1.0670.
USDJPY: The USDJPY is moving higher with the USD. Looking at the price action,the price moved above the 618.% of the move down from the July high at 153.397 and the 153.88 highs from last week and going back to the end of July. The price has stretched toward the next swing area between 154.54 up to 154.878 (see red numbered circles), but remains below that level (with a high at 154.45).
The buyers are in control. Close support is now down to the 61.8% at 153.397. Stay above keeps the buyers in firm control. More aggressive support would now be at 153.88 for traders. The current 4-hour bar has been able to stay above that level (the low over the last 4-hourly bars is at 153.87 as proof).
GBPUSD: The GBPUSD moved higher pre-election results (end of yesterday) and in the process. With the dollar buying, the price move below the 100-day MA, the 100 bar MA on the 4-hour chart, and then the swing level at 1.2938.
The price moved to low that stalled just below the low from last week at 1.28449. The low reached just below that level at 1.28405 so far. The current price is at 1.2857. That puts the price in the middle of a swing area between 1.28449 up to 1.28719. That is close risk (up to 1.28719). A move conservative risk level is up to 1.29064. That was the low from a few weeks ago. That can be a risk defining level as could the 1.2938 level. Staying below all, you can argue keeps the sellers more in control.
USDCHF: The USDCHF based yesterday and early today within a swing area between 0.86078 to 0.8619. When the price started to move higher, the pair moved above the 100-day MA at 0.8671 and stayed above. The price moved above the 50% at 0.8711 and the high from 0.87482. There was a low going back to July 25 at 0.8775. The high today has reached 0.8773. The 61.8% of the move down from the July high comes in at 0.87915. If I took the retracement to the high in April, the 50% midpoint is at 0.87986. Let’s say the 0.8800 area is a key target followed by the 200-day MA at 0.8816.