EUR/USD plunges on Trump election win

Trump win sends US dollar soaring

EUR/USD is getting hammered on Wednesday. In the North American session, the euro has tumbled by 1.90% and is trading at 1.0725. Earlier, the euro fell as low as 1.0682, its weakest level since June 28.
The US dollar has surged against all of the major currencies after Republican Donald Trump cruised to a surprisingly easy victory. The election polls pointed to a dead heat between Trump and Democrat Kamala Harris and there were fears of recounts and court challenges if the result was close, which could have led to political instability for weeks. Instead, Trump won a clear and decisive victory and gave a victory speech earlier on Wednesday. The vote count isn’t over but the Republicans have won the Senate while the House of Representatives is too close to call. If the Republicans can hold onto the House, Trump will have a much easier path to push through his agenda.

A Trump presidency 2.0 has raised fears of import tariffs, which Trump has used as a key weapon in trade policy in the past, particularly against China. Tariffs would make imports more expensive and trade wars would hurt the global economy. US stock markets have soared today on the election news, but if Trump makes good on his threat for new tariffs, investor confidence would likely fall and push the stock markets lower.

In the eurozone, the services sector is expanding but at a weak pace. Eurozone Services PMI improved from 51.2 to 51.6 and the German Services PMI from 51.4 to 51.6. The50 level separates expansion from contraction.

EUR/USD Technical

• EUR/USD has pushed below several support levels. 1.0767 and 1.0699 are the next support levels
• There is resistance at 1.0904 and 1.0973

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