Following Donald Trump’s surprise election win, the U.S. dollar surged across major currencies, sharply impacting EUR, GBP, JPY, and Gold. The euro and pound plunged as markets expected Trump’s policies, like higher tariffs, to support inflation and potentially increase interest rates. The yen also weakened considerably amid stronger U.S. dollar sentiment, further fueled by Japan’s hold on interest rates. Meanwhile, gold saw a swift sell-off as rising Treasury yields diminished its appeal as a safe-haven asset. The dollar’s momentum remains strong as Trump’s fiscal and trade policies shift investor interest away from non-yielding assets.
EUR/USD
Market Overview: The EUR/USD pair faced significant downward pressure following Donald Trump’s unexpected U.S. presidential election win, leading to increased U.S. dollar strength across the board. With a 1.90% drop, the pair reached lows around 1.0682, reflecting the dollar’s surge. This downtrend has been driven by market sentiment favoring U.S. economic strength under a Trump administration, particularly around anticipated tariffs and inflationary policies that may boost interest rates. Meanwhile, the Eurozone is experiencing subdued economic expansion, with PMIs indicating only modest growth, signaling a weak euro.
Technical Analysis:
- Support Levels: 1.0716, 1.0678, 1.0630
- Resistance Levels: 1.0767, 1.0904, 1.0973
- Trend: The EUR/USD hourly trend remains bearish, and the pair’s drop indicates a continuation of the downtrend. Immediate support lies at 1.0678 and 1.0630; should the pair break below 1.0630, we may see further selling towards 1.0560.
Forecast and Strategy: A Trump administration likely means further U.S. dollar strength in the short-to-medium term due to inflation expectations and higher Treasury yields. Traders are advised to look for selling opportunities at resistance levels, especially around 1.0767 and 1.0904. Conversely, a break above 1.0933 could signal a reversal, making 1.0973 the next target for any potential upside.
GBP/USD
Market Overview: The GBP/USD pair has mirrored the EUR/USD’s bearish trend, exacerbated by weaker-than-expected U.K. economic data. A Trump victory has further strengthened the dollar, while the pound remains pressured as markets anticipate a possible rate cut by the Bank of England, which could further devalue the currency.
Technical Analysis:
- Support Levels: 1.2848, 1.2733, 1.2642
- Resistance Levels: 1.2919, 1.2950, 1.3023
- Trend: The GBP/USD is in a bearish trend, with sellers firmly in control. The 1.2733 and 1.2642 support levels are crucial for preventing further declines; if broken, it may open the door for a slide towards 1.2600.
Forecast and Strategy: The pound is likely to stay under pressure in the near term, particularly with the Bank of England expected to cut rates. Short positions remain favorable below the resistance at 1.2950, with support at 1.2848 providing an entry point for sellers. A break above 1.3023 could signal a reversal.
USD/JPY
Market Overview: USD/JPY surged dramatically, gaining about 2% as the dollar strengthened against the yen following Trump’s election. The prospect of tariff-driven inflation under Trump’s policy agenda, combined with stable BoJ policy, has made the yen less attractive. The BoJ has committed to accommodative policy, keeping the yen suppressed as U.S. yields rise.
Technical Analysis:
- Support Levels: 153.54, 152.65, 151.64
- Resistance Levels: 154.31, 155.20, 155.85
- Trend: USD/JPY is strongly bullish, with the recent break above 154 signaling potential for continued gains. Should resistance at 155.20 be broken, 155.85 could be tested, marking a significant multi-month high for the pair.
Forecast and Strategy: Given the continued dollar strength and BoJ’s reluctance to raise rates, USD/JPY may advance toward 155.20 and possibly higher. Buyers should look for entries near support levels, particularly if the pair retraces toward 153.54. Short positions are advised only if a significant breakdown occurs below 151.64, signaling a reversal.
Gold (XAU/USD)
Market Overview: Gold has fallen sharply amid U.S. dollar strength, following Trump’s election win, which has raised market expectations of prolonged high interest rates, diminishing gold’s appeal as a safe-haven asset. As Treasury yields climb, investors are shifting away from non-yielding assets like gold, further pressuring prices.
Technical Analysis:
- Support Levels: 2650, 2639, 2624
- Resistance Levels: 2673, 2685, 2700
- Trend: Gold’s daily and four-hour charts are bearish. With the recent break below 2700, momentum may lead prices toward the 2639 level, a significant support area. A sustained break below this level could result in further declines, with the 2624 level in focus as the next target.
Forecast and Strategy: Gold’s outlook remains bearish in the near term. For short positions, a break below 2639 would reinforce the bearish bias, with stops recommended just above the 2673 resistance. Traders may look for potential retracements toward the 2685 resistance level for possible short entries. In the alternative scenario, if prices rise above 2700, it could signal an end to the current downtrend, with a reversal toward 2725 possible.
The market landscape across EUR/USD, GBP/USD, USD/JPY, and Gold is predominantly influenced by strong U.S. dollar momentum following Trump’s election, which is boosting U.S. yields and reducing safe-haven appeal. Overall, bearish outlooks prevail for EUR/USD, GBP/USD, and Gold, while USD/JPY appears firmly bullish. Investors should approach these pairs with a bias toward the U.S. dollar’s strength, favoring short positions on EUR, GBP, and Gold, while looking for opportunities to buy the USD/JPY pair at support levels.
