GBP/USD. The battle for the US presidential seat 2020. Part two.


In the first part of the euro/dollar, we found out that Donald Trump has almost no trumps left on his hands that could help him get re-elected for a second term. Thus, if his support rating (according to regularly conducted social research) is really 40-45%, then this is a very high value for the current American reality. However, this is not enough to defeat Joe Biden.

The election campaigns of both candidates run differently. Trump, as usual, is active. In the sense that he is actively throwing mud at Joe Biden, the Democrats, Nancy Pelosi, China, and everyone who does not support him. Biden is less active, and rarely responds to Trump's attacks. However, now all these verbal skirmishes are not particularly important and interesting. Americans have become accustomed for almost 4 years to the fact that Trump's statements need to be "divided by 8". Accordingly, few people really believe everything that Trump says. And the current head of the White House predicts almost an apocalypse if Joe Biden comes to power. Trump believes that China will rule America if Biden becomes President and the country's energy sector collapses. In principle, Trump can now only promise the fall of a meteorite on America if "sleepy Joe" becomes President. In general, all this is demagogy and most sane people do not pay attention to it. But what you really need to pay attention to is the method of voting in elections. Due to the fact that the country was engulfed by an epidemic, the elections will also be held using remote voting, that is, by mail. This does not mean that there will be no polling stations and Americans will not be able to attend them in person. However, many Americans will not want to go to places of mass congestion, they will not want to risk their health, so voting will be possible with the help of mail. Now imagine how much easier it is to falsify any vote if people do not come to the polling stations in person. With the help of mail, you can "wind up" as many votes as you want, since the turnout in elections is never 100%. Moreover, there may be cases of outright fraud, destruction of ballots in which the vote was given to the "wrong" candidate, loss of certain ballots or "computer errors". So, in fact, in the November 2020 election, how Republicans and Democrats control the post office will make a huge difference. The outcome of the vote will depend on the mail, on how honest or dishonest the calculations and the vote itself will be. And here the scope for various maneuvers is huge for both candidates. Interestingly, at the current stage, it is Donald Trump who says that the election can be "rigged". Biden, on the contrary, believes that voting by mail is a great idea at a time when the entire country is gripped by a pandemic.

Let's move on. The next important aspect is that almost any election result can be declared dishonest, falsified, or twisted by any candidate. That is, nothing prevents Joe Biden, for example, to say that Trump has won votes in some states, which led to his victory in the election. Recall that the peculiarity of the American voting system is that it is not necessary to set the maximum number of votes across the country. That is, for example, in total, Trump can get 55% of the vote, and Biden - 45%, but it is Biden who wins, because the so-called "electoral votes" are important. Each state in the country has its own number of "electoral votes", which is determined depending on the size of the state's population. Thus, one state can have 4 such votes, and the other – 54. There can only be one winner in each state, and it is to him that all "electoral votes" are given. It does not matter what the percentage of voters will be. Trump may get 90% support in some state, or he may get 51% support. In both cases, all "electoral votes" will be given to him. Therefore, it is extremely important for both candidates to win in the states with the maximum fixed number of "electoral votes". Now let's imagine a situation where, for example, in California, Biden's support is now 52%, and Trump's support is 48%. This means that Trump needs to win only a few percent of the vote, or that a certain number of ballots in which the vote is given to Biden are "lost" in this state. And then all 55 "electoral votes" will go to him, and not to his opponent. And there are about 10 such "disputed states", where the difference in support for both candidates is only a few percent.

This is the situation before the presidential election in 2020. And the most interesting thing is that despite all the social research, if we take into account everything written above, the chances of candidates are now 50/50, and everything will depend on how well the post office will work on November 3 and how fair the elections will be. In normal voting, when voters come to the polling stations, there is usually a clear control system that virtually eliminates the possibility of fraud. It is still impossible to say what will happen in the "postal vote".

For the US dollar, all these issues are extremely important. We believe that until election day, the US currency may continue to remain under market pressure. It is unlikely that the US economy will begin to recover at a rapid pace in the near future, given that Democrats and Republicans have not been able to agree on a new package of economic assistance to unemployed Americans, as well as businesses. Accordingly, macroeconomic reasons for growth for the US currency are unlikely to appear in the coming months. The US dollar now has to rely only on technical factors. After all, this currency has been falling for several months in a row, thanks to the "four crises" in the US. However, this process can not be eternal. Sooner or later, the bulls will reduce long-term long positions, which should lead to a noticeable correction of both major currency pairs, and not to a downward movement of 150-200 points.


Trading recommendations for the GBP/USD pair:

The pound/dollar pair, in contrast to the European currency, which continues to trade in a side channel, resumed its upward movement last week and worked out the resistance level of 1.3346. Thus, traders continue to ignore the fact that the economic situation in the UK is not much better than in the United States. We can once again note that traders attach great importance to the "four American crises". So strong that even all the negative consequences of Brexit and the lack of a deal between Brussels and London, now do not interest market participants.

The material has been provided by InstaForex Company -