US dollar declines against peers as Biden wins presidency
The US dollar is down against key currencies as traders focus on the upcoming regime change in the United States. Over the weekend, Joe Biden was declared the winner after he crossed the important 270 electoral votes even as Donald Trump’s team filed multiple claims in court. Analysts believe that the incumbent will not succeed in these claims. Later today, the currency will react to US wholesale trade sales numbers and speeches by Fed members like Patrick Harker and Loretta Mester.
The price of crude oil rose during the Asian session as traders started to focus on the Biden agenda that will favour ‘green’ energy over fossil fuels. In the US, Biden has pledged to stop most oil drilling in key public lands, which is a positive thing for crude oil prices. However, he has also promised to work out another deal with Iran after the Trump administration walked away from the JCPOA (The Joint Comprehensive Plan of Action). If Iran returns to the market, it will be a negative thing for prices because of higher supplies. Meanwhile, data by Baker Hughes showed that oil rigs increased by 4 to 300, which means that oil production is set to increase.
The euro is up slightly against the pound and the US dollar ahead of a key speech by Christine Lagarde. The ECB president will speak about the recent monetary policy and what the bank will do if the economic situation remains dire. That is because, in recent days, the number of covid cases has reportedly increased pushing some countries to implement measures to slow the spread. The euro will also react to the latest German trade numbers and the Sentix investor confident data.
The EUR/USD pair rose to an intraday high of 1.1890, which is the highest it has been since September 15. On the four-hour chart, the price has moved above the 15-day and 25-day exponential moving averages. It has also moved above the important resistance at 1.1880, which was October’s high. The Relative Strength Index (RSI) has also moved above the overbought level. Therefore, the pair is likely to continue rising as bulls attempt to move above 1.1900.
The GBP/USD pair rose to an intraday high of 1.3180 mostly because of dollar weakness. On the four-hour chart, the price has moved above the October high of 1.3175. It is also above the 25-day exponential moving averages while the awesome oscillator has moved above the neutral line. Similarly, the signal and main lines of the MACD have also moved above the neutral line, which is a signal that bulls have prevailed. That means that the price will possibly continue rising as bulls aim for the next resistance at 1.3200.
The AUD/USD also rose during the Asian session. It is trading at 0.7285, which is the highest it has been since September. On the four-hour chart, the price is above the 15-day and 25-day exponential moving averages. It has also moved above the 61.8% Fibonacci retracement level. Also, it is forming a bullish pennant pattern, which means that the price will continue rising as bulls aim for moves above 0.7300.