KVB Market Analysis | 23 Oct: US Election's Impact on Crypto: Trump vs. Harris

Product: EUR/USD

Prediction: Decrease

Fundamental Analysis:

EUR/USD posts a fresh 11-week low at 1.0800 in Tuesday‘s North American session. The major currency pair weakens on the downbeat Euro (EUR) as traders have priced in the European Central Bank (ECB) to cut interest rates again in the December meeting. ECB dovish bets have swelled as growing risks to the Eurozone’s economic growth are expected to keep inflationary pressures within striking distance of the central banks target of 2%. This would mean the fourth interest rate cut by the ECB this year. Data released on Monday showed that the German Producer Price Index (PPI) deflated by 1.4% year-over-year (YoY) in September, faster than 0.8% in August, and pointed to the inability of producers to raise prices of goods and services at factory gates due to weak household spending. Meanwhile, the International Monetary Fund (IMF) has downgraded Germany's Gross Domestic Product (GDP) forecasts for 2024 and 2025. The agency sees the German economy stagnating this year and a 0.8% growth for the next year.

Technical Analysis:

EUR/USD struggles to hold the immediate support of 1.0800 in North American trading hours. The outlook of the major currency pair remains uncertain as it trades below the 200-day Exponential Moving Average (EMA), which trades around 1.0900. The downside move in the shared currency pair started after a breakdown of a Double Top formation on a daily timeframe near the September 11 low at around 1.1000, which resulted in a bearish reversal. The 14-day Relative Strength Index (RSI) dives below 30.00, indicating a strong bearish momentum. However, a recovery move remains on the cards as conditions turn oversold.

Product: USD/JPY

Prediction: Increase

Fundamental Analysis:

USD/JPY flirts with the 151.00 level, driven by rising US Treasury yields but held back by key resistance at the top of the Ichimoku Cloud. Momentum remains bullish, with the RSI hitting a new high, suggesting further upside towards the 200-DMA at 151.36 and beyond. A break below 151.00 could see support at 149.68, with further downside risks targeting the October low at 149.09.

The US Dollar prints back-to-back gains against the Japanese Yen on Tuesday but struggles to clear the 151.00 figure decisively. At the time of writing, the USD/JPY trades at 150.92, as the US 10-year T-note yield keeps the pair contained at around current exchange rates.

Technical Analysis:

The AUD/USD pair trades around 0.6660 on Tuesday. Technical analysis of the daily chart shows the pair below the nine-day Exponential Moving Average (EMA), indicating a short-term bearish outlook. Furthermore, the 14-day Relative Strength Index (RSI) remains below 50, reinforcing the bearish sentiment. On the downside, the pair could test its eight-week low of 0.6622, last reached on September 11, followed by the psychological level of 0.6600. Resistance may come from the nine-day EMA at 0.6700, followed by the 50-day EMA at 0.6734. A break above this level could open the door for a move toward the psychological resistance of 0.6800.

Product: BTC/USD

Prediction: Decrease

Fundamental Analysis:

The White House plays a pivotal role in shaping the future of crypto, experts say, so the results of the US presidential election could impact the prices of Bitcoin and altcoins. Donald Trump‘s odds of winning the US presidential election are higher than those of Kamala Harris, according to crypto prediction market Polymarket. Crypto regulation in the US has emerged during the campaign for the first time, with experts saying that Trump’s win would undoubtedly favour the industry. Ripple co-founder supports Harris as the firm continues to battle the SEC over the status of XRP.

Technical Analysis:

BTC/USD – The near-term action is in the red after another failed attempt to break the psychological 70K barrier, but the move down appears to be a limited correction ahead of another push higher. The long tails on today‘s and Monday’s daily candles indicate strong buying interest, supporting the scenario of shallow dips before further gains. The rising 10-day moving average and the 23.6% Fibonacci retracement of the 58,850/69,527 upleg have contained the dips so far. A bullish technical outlook on the daily chart, with strong momentum and moving averages in a bullish configuration, supports the action. Additionally, thickening and rising weekly Ichimoku clouds keep the focus on the key 70K level.