US Elections 2020: EUR/USD Decline Sharply, USD/JPY is Surging

Aayush Jindal -

EUR/USD declined sharply after it was rejected near the 1.1770 zone. USD/JPY is gaining momentum and it is trading nicely above the 105.00 level.

Important Takeaways for EUR/USD and USD/JPY

  • The Euro failed to hold gains above 1.1750 and declined sharply below 1.1700.
  • There was a break below a key bullish trend line with support near 1.1700 on the hourly chart of EUR/USD.
  • USD/JPY started a fresh increase after it cleared the 104.75 resistance zone.
  • There was a break above a major contracting triangle with resistance near 104.72 on the hourly chart.

EUR/USD Technical Analysis

Recently, there was a decent upward move in the Euro from the 1.1640 support zone against the US Dollar. The EUR/USD pair climbed above the 1.1720 and 1.1750 resistance levels, but it struggled to continue higher.

A high was formed near 1.1769 on FXOpen and there was a sharp decline. The pair tumbled below the 1.1750 and 1.1700 support levels. There was also a break below a key bullish trend line with support near 1.1700 on the hourly chart of EUR/USD.

The pair even broke the 1.1680 support level and the 50 hourly simple moving average. The pair traded as low as 1.1605 and it is currently correcting higher.

There was a break above the 1.1640 level, and the pair traded above the 23.6% Fib retracement level of the recent decline from the 1.1769 high to 1.1605 low. However, the pair is facing a strong resistance near the 1.1660 and 1.1680 levels.

The 50 hourly simple moving average is also near the 1.1665 to act as a hurdle. The main hurdle is forming near the 1.1700 zone and the 50% Fib retracement level of the recent decline from the 1.1769 high to 1.1605 low.

On the downside, the 1.1620 level is an initial support. The main support is forming near the 1.1600 zone, below which there is a risk of a sharp decline towards the 1.1550 and 1.1540 levels in the near term.

USD/JPY Technical Analysis

The US Dollar formed a decent support base above 104.20 and started a fresh increase against the Japanese Yen. The USD/JPY pair broke the 104.50 resistance level to move into a positive zone.

There was a clear break above the 104.55 and 104.70 levels. Moreover, there was a break above a major contracting triangle with resistance near 104.72 on the hourly chart. It opened the doors for more gains above the 105.00 resistance level.

The pair rallied and traded as high as 105.34 and recently started a downside correction. There was a break below the 105.25 level.

An initial support is near the 23.6% Fib retracement level of the recent wave from 104.37 swing low to 105.34 high. The main support is near the 105.00 level (the recent breakout zone). Any further losses could lead it towards the 104.85 support.

The 50% Fib retracement level of the recent wave from 104.37 swing low to 105.34 high is also near the 104.85 level to provide support. The main support is forming near the 104.70 level and the 50 hourly simple moving average.

Conversely, USD/JPY might resume its upward move above the 105.25 and 105.40 levels. The next major hurdle for the bulls is near the 105.80 level.