US Dollar On The Rise: Key Levels To Watch Ahead of the Elections

Hello everyone and welcome to our new blog post!

In this update, I will discuss the US dollar, US yields and will look at EURUSD levels.

As you know, the US dollar is experiencing strong upward pressure, driven by speculations that Trump could win the upcoming US elections. However, we are still two weeks away from the election, leaving plenty of time for the dollar to continue rising.

What's crucial for the US dollar is the direction of US Treasuries, which are currently showing a five-wave decline from the September highs. This indicates a strong trend that we expect to resume after any three-wave corrections. In my opinion, with US Treasuries heading lower, the US dollar could rise towards the 107 resistance zone. But until we reach those levels, there could still be opportunities to go long on the dollar, especially if we see intraday pullbacks.

I'm closely watching EURUSD, as it has remained weak due to the dovish stance of the ECB, which is expected to cut rates further. Europe's economy, especially in Germany, is not in great shape, while the US economy is doing much better, which is one of the reason why US yields are rising. This makes the dollar more attractive than the euro, and I expect this dynamic to persist, creating potential short opportunities on EURUSD.

However, I would wait for a potential rebound to the 1.0880 to 1.0950 area before considering shorts. The idea is to wait for rallies and not chase the market down hre, as moves have been sharp and mostly in one direction. Trading with the trend is key, but it's important to wait for a pullback before entering.

Thank you for reading this article!

Grega Horvat

Forex Analytix