It was a bit of a wild ride for the USD yesterday, as we swung between the highs and the lows and the election results were up in the air in early Asian trading.
By the end of the day, it was clear that we would have a split Congress and that meant there was at least some certainty around.
A few of the major investment banks like Morgan Stanley have come out and predicted a weaker USD, given the success of the Democrats and what that might mean for the economy.
Either way, US stocks responded strongly to the result and rallied hard. With the SPX up more than 2% and the NASDAQ up more than 3%.
The USD Outlook
The DXY is still trading between the resistance level at 97.00 and support at 96.20.
After falling below 96.00, price jumped back into range and have basically held up where we left off before the midterms began.
I’m continuing to monitor the 96.20 level. If we drop that level and press through 96.00, then I’ll reassess my current outlook, which is still bullish in the short-term.
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