Impact of US elections on the US Dollar
The US elections took place on 8 November 2016 where the 2 main candidates were Clinton, from the Democratic Party, and Trump, from Republican Party. The financial markets were ‘pricing in’ a Clinton win but as the election night unfolded, it became clear that a Trump win become increasingly possible. Initially, the EUR/USD hit the 50% Fibonacci level but quickly reverted upwards as a Trump win started to become more probable. The bullish price reaction is does align with the expected ABC zigzag mentioned yesterday. Price action can remain volatile as the last states still need to report the final results.
The EUR/USD has reached the 100% Fibonacci level but the price action remains volatile.
The GBP/USD keeps building a WXY (blue) correction within wave 4 (green). Once wave 4 (green) is completed, a downtrend continuation is expected to push below support for wave 5 (blue/purple). For now, a bullish reaction is also visible on the Cable.
The GBP/USD could be building an ABC zigzag, although all wave counts are vulnerable due to the political event.
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