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EUR/USD Hits Two-Week Highs on U.S. Election Day

Published 11/08/2022, 10:26 AM
Updated 07/09/2023, 06:32 AM

The U.S. remains on the defensive on Tuesday, with the EUR/USD advancing to fresh to a two-week high while investors remain cautious on the U.S. midterm election day.

At the time of writing, the EUR/USD is trading at the 1.0065 zone, 0.45% above its opening price. The dollar saw a short-lived bounce earlier on the day but then turned lower alongside Treasury yields.

The midterm election outcome might impact fiscal policy as Republicans are ahead in the polls. Americans are voting to elect one-third of the Senate, all seats of the House of Representatives, and more than 30 governors.

Meanwhile, the euro got some support from the European Central Bank Luis de Guindos' comments and better-than-expected data. The ECB Vice-President stated the Governing Council would continue to raise the rates to ensure that inflation,

"Will come back into line with the ECB's definition of price stability."

Eurozone Retail Sales advanced 0.4% in September, just as expected, and recorded a 0.6% yearly decrease, much better than expectations of a 1.3% decline.

EUR/USD daily chart.

From a technical standpoint, the EUR/USD short-term perspective remains tilted to the upside according to indicators on the daily chart as the price struggles to establish itself above the 100-day SMA.

A decisive break above the 100-day SMA could pave the way to the 1.0100 area, ahead of September's highs at 1.0197. On the other hand, the following support levels could be faced at parity and then at the 20-day SMA standing around 0.9875.

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