EUR/USD inter-markets: waiting for the dust to settle
EUR/USD has fully reverted the earlier test of the 1.1300 region, turning negative for the day and on its way to challenged the key psychological support at 1.1000 the figure.
In the meantime, and after Donald Trump has become the 45th US President, the greenback is extending the bounce off daily lows and prompting the risk-associated assets to surrender initial gains.
German money markets are showing yields navigating in the red territory, while their US peers remain on the rise, hence sustaining the better momentum in the buck. Furthermore, CME Group’s FedWatch tool is now pointing to a probability of a rate hike by the Fed at nearly 67% in December, based on Fed Funds futures prices.
With the US elections already in the rear-view mirror, it is expected that market participants shift their attention to the US monetary policy as the main driver of the pair’s price action via USD-dynamics.
As markets are returning to normalcy following the unexpected victory by billionaire D.Trump, EUR/USD faces increasing risks of re-visiting daily lows at 1.0990, ahead of the 1.0950 area, or July low. An acceleration of the downside pressure could pave the way for a test of post-Brexit low in the 1.0900 neighbourhood and then the key area at 1.0820, March low.