EUR/USD edged up to 1.1254 on Thursday as the dollar softened after US midterm election results left Democrats in a stronger position. Markets read the outcome as reducing political uncertainty and lifting global equities, which in turn diminished demand for the dollar’s safe-haven status. Technology shares tied to artificial intelligence weakened on concerns that the shift in influence could affect future investment in data centres. Expectations of policy gridlock in Washington also increased, while worries about a resumption of US strikes against Iran eased; oil prices fell sharply, lowering perceived inflation risk and adding to dollar pressure. Attention now turns to Friday’s US labour market report, as traders continue to price the Fed outlook with the implied probability of a December rate hike seen at around 79%.
EUR/USD Technical Outlook
On charts, the medium-term downtrend remains in place despite a rebound from support at 1.1104. The pair is probing resistance at 1.1268, with nearer support at 1.1223 and a further downside level at 1.1185; a close below 1.1185 would bring 1.1104 back into focus. MACD stays above zero with an upward-pointing signal line, while the H1 Stochastic is above 80 and starting to tick lower, pointing to correction risk; a sustained break above 1.1268 would shift focus to 1.1291.
