The post-election trade in the dollar hasn’t been too straightforward over the last two days to say the least. The greenback saw gains abate yesterday but is looking to recover back some ground again in trading today. But even then, it isn’t that convincing with the dollar lagging against the yen and franc on the day.

The former owes to lower Treasury yields, with 10-year yields dipping back by another 4 bps to 4.30% currently. It’s still at a high point compared to where we were before October but on the week itself, yields are pretty much flat now. So, that is also one reason why the dollar has struggled to follow through with gains.

But as a whole today, dollar bulls are looking to test the waters again. EUR/USD is down 0.3% to 1.0770 though large option expiries are also in play, potentially boxing in price action for now. Meanwhile, GBP/USD is down 0.3% to 1.2950 and USD/CAD up 0.3% to 1.3895 currently.

The laggards are the antipodeans and that owes to softer sentiment surrounding China as well. AUD/USD is down 0.6% to 0.6635 with sellers looking to make a play again on the technical side of things:

The rebound yesterday fell just short of contesting the 100-day moving average (red line). And sellers are now driving price back lower to test the 200-day moving average (blue line) at 0.6628. Break back below that and the bias in the pair will return to being more bearish once again.

As much as Trump’s election win has reignited the dollar flames again, a lot will also depend on bond market developments.

So far, traders are not really extending the higher jump in yields since October. And that is keeping the dollar at bay from rampaging across the board. But perhaps there is a case that we might be settling into a new regime of higher US yields from here.

And if so, that will allow the dollar to flex its muscles later on once traders get settled in. That especially if Trump’s policies are going to lead to higher domestic inflation while impacting growth outlooks in other countries.

It’s still only two days into the post-election window. There’s going to be much more for traders to digest and take into consideration in the months ahead. So, I guess it’s also a good thing that markets are not getting too carried away just yet.

This article was written by Justin Low at www.forexlive.com.

The US Dollar is now lower
across the board as the market erased most of the greenback’s gains following
Trump’s victory. This has been a puzzling reaction as Trump’s policies are
likely to spur growth and potentially end the Fed’s easing cycle earlier than
expected.

We can argue that the
market was already positioned for a Trump’s victory as we saw the greenback
rallying for a couple of weeks leading into the US election. So, this might
just be a “sell the fact” reaction and the market might now need more to keep
bidding the USD.

Another possible
explanation is that the market is more focused on global growth now and that’s
generally bearish for the greenback. We saw something similar in 2016 when the
USD rallied strongly once Trump got elected but after a couple of months, it went
into a 2-year long downtrend.

The Fed for now remains
neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral
message, the market expects another 25 bps cut in December. Strong data from
now until the December meeting though could change their plans for 2025.

We have the US CPI report
next week and that’s going to be a test. If the US Dollar sells off on hot
data, then the market might be indeed focusing on global growth rather than the
potential for an earlier pause in the Fed’s easing cycle.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD spiked to a new low as Trump got elected President but
eventually reversed course and rallied into a new high. We have a key level
around 0.6622. The buyers will likely step in there with a defined risk below
the level to position for a rally into new highs. The sellers, on the other
hand, will want to see the price breaking lower to pile in for a drop into the
0.64 handle.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price is reacting to the key level as we got the first rejection.
There’s not much more we can add here as the buyers will look for a bounce,
while the sellers will look for a break lower.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that at the moment we have a downward trend on this timeframe. The buyers
will want to see the price breaking above the most recent lower high around the
0.6660 level to increase the bullish bets into new highs. The red lines define
the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the University of Michigan Consumer Sentiment
report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The US Dollar is now lower
across the board as the market erased most of the greenback’s gains following
Trump’s victory. This has been a puzzling reaction as Trump’s policies are
likely to spur growth and potentially end the Fed’s easing cycle earlier than
expected.

We can argue that the
market was already positioned for a Trump’s victory as we saw the greenback
rallying for a couple of weeks leading into the US election. So, this might
just be a “sell the fact” reaction and the market might now need more to keep
bidding the USD.

Another possible
explanation is that the market is more focused on global growth now and that’s
generally bearish for the greenback. We saw something similar in 2016 when the
USD rallied strongly once Trump got elected but after a couple of months, it went
into a 2-year long downtrend.

The Fed for now remains
neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral
message, the market expects another 25 bps cut in December. Strong data from
now until the December meeting though could change their plans for 2025.

We have the US CPI report
next week and that’s going to be a test. If the US Dollar sells off on hot
data, then the market might be indeed focusing on global growth rather than the
potential for an earlier pause in the Fed’s easing cycle.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF couldn’t extend the rally above the key resistance zone around the 0.8730 level. We now
have an upward trendline
defining the bullish momentum. We can expect the buyers to lean on it to
position for a rally into new highs, while the sellers will look for a break lower
to increase the bearish bets into new lows.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor support around the 0.87 handle. The buyers will likely
step in there with a defined risk below it to target new highs, while the
sellers will look for a break lower to increase the bearish bets into the major
trendline.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much to add here as the buyers will look for a bounce around the 0.87
handle, while the sellers will look for a break. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the University of Michigan Consumer Sentiment
report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.