Euro / U.S. DollarUpdated Fundamental Analysis of EURUSD
EURUSD is trading in the support area which has been respected by the price action since December of 2022. Similarly, there is an area of resistance.
There are two scenarios based on the current geopolitical tension and the policy of the new administration in the US.
Scenario#1: Risk OFF or USD depreciates against EUR and other currency pairs
The new US administration will take charge in Jan 2025, and by that time if the Scenario#2 has not happened then the EUR should appreciate significantly against USD. The new administration is expected to be business friendly. The US economy should get an ultra-boost because of lower taxes and less regulations.
There are many other promises made by the winning party like the increase in import tariffs on all the countries, deportation etc., maybe those promises were to attract voters. We don't know how it will play out, so we go with the simple approach that republican party means less regulation, hence business friendly.
Scenario#2: Risk ON or USD appreciates against EUR and other currency pairs
This scenario could play out even before the new administration takes charge!!! We don't know if it is a bluff from Russia or a real threat, but the fear of nuclear war can be frightening. Whenever there are major escalations in the world, the USD appreciates and that is as simple as 1 + 1 = 2, right?
There are two scenarios based on the current geopolitical tension and the policy of the new administration in the US.
Scenario#1: Risk OFF or USD depreciates against EUR and other currency pairs
The new US administration will take charge in Jan 2025, and by that time if the Scenario#2 has not happened then the EUR should appreciate significantly against USD. The new administration is expected to be business friendly. The US economy should get an ultra-boost because of lower taxes and less regulations.
There are many other promises made by the winning party like the increase in import tariffs on all the countries, deportation etc., maybe those promises were to attract voters. We don't know how it will play out, so we go with the simple approach that republican party means less regulation, hence business friendly.
Scenario#2: Risk ON or USD appreciates against EUR and other currency pairs
This scenario could play out even before the new administration takes charge!!! We don't know if it is a bluff from Russia or a real threat, but the fear of nuclear war can be frightening. Whenever there are major escalations in the world, the USD appreciates and that is as simple as 1 + 1 = 2, right?
Note
The EURUSD price is bouncing around the support area since I posted this trade idea. I am still in EURUSD long trade.Trade active
The support areas is broken, EURUSD is trading well below the support area. It was not war but the fed who let USD to appreciate :-). Trade closed: stop reached
I was long EURUSD, stopped out.
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