With the picture largely painted now, here’s how are markets fairing

Pretty much the expected outcome as the last results roll in. It looks like we’ve had nothing more than some algo chop in markets.

  • USDJPY had half a glance up near 114.00, getting only as high at 113.82 on the early results but has looked offered ever since. Strong bids held well into 113.00 before that and they could well mark a solid bottom again, depending on how much was chewed through the first time round
  • EURUSD is finding the 1.1470 area a tough nut to crack while 1.1390 is where the bulk of support is sitting. That’s a fairly decent range to play with 1.1500 the next target should the top go
  • GBPUSD – The quid is still looking very supported and dips of any note are pretty hard to come by. There was a good 70 odd pip move in the election chop and the direction is still evident. If we don’t get any fresh Brexit news, things might start to frazzle out if we mooch on up to around the 1.32 area
  • AUDUSD is mirroring the moves in other pairs but on a smaller scale. We have broken above the 16th Feb down trend for the first time this year and the price is trying to build on that break
  • USDCAD got woken up by the election partying but has since rolled over and gone back to sleep. It’s managed a 55 pip range so far today, a huge improvement on the 30 odd pips yesterday
  • NZDUSD is the standout performer so far today after a great employment report. That’s got a fair few in the market vastly changing their RBNZ expectations (which is tonight). Will one swallow make a summer for those longs? Support has already been found at the broken resistance areas of 0.6720 & 0.6695/0.6700, while the top has found an old S&R area around 0.6780. The 38.2 fib of the April drop sits close to the 0.68 big fig

Overall, as expected, not too much to fuss about in FX markets. US stock futures are pretty steady and flat. US 10yr yields are sitting at session lows of 3.178% after a high of 3.248%. Both these markets are likely to be the leading factors for FX once the US wakes up to the full results, and we start getting all the roof top shouting. It’s going to be another headline driven day methinks as both US political parties trumpet their victories and gloss over their respective losses. The main risk is how the Dems will look to oppose Trump moving forward.

As I said before the elections, none of this changes the current fundamental picture in the US, nor the path of the Fed (of which we have the FOMC tomorrow) so outside of any major headlines and “day after” market repositioning, it should be business as usual.

Have a great day all.

Ryan Littlestone

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