How long will the election of the President of the United States last? Even the Americans themselves cannot answer the question. It seems that though the elections have passed, it seems that they are still going on. Someone is already appointing new Ministers while someone is still hoping for victory.
We are talking about two main characters, Trump and Biden, who decided to make the 2020 election memorable for a long time.
Everything would be fine but the coronavirus pandemic is raging in the world and its trend is growing. Experimental vaccines for the virus have been developed. The economy is going through the worst of times. Investors are scared.
Put yourself in the shoes of strategic investors. They see the media shouting victory for Biden, who without official results calls for a transfer of cases and appoints new ministers. At the same time, the incumbent President is firing off sparks and tweets, calling for a recount and accusing Biden of rigging the election.
"He won because the election was rigged. There were no observers to monitor the voting and counting of votes. The vote is being conducted by a private company of the radical left, Dominion, with a bad reputation and mindless equipment that could not even pass certification in Texas, Fake & Silent Media, & More!" Trump said in a tweet @realDonaldTrump
Joe Biden's staff responded to such harsh accusations of fraud, saying that Trump's outburst only confirms Biden's victory in the election.
"I see this as another confirmation of the reality that Joe Biden won the election," said Ron Kline, a Biden staff member
In turn, Trump tweeted that "I won the election!", while Twitter put a note under his post that the information contradicts official sources about the election results.
Now you have no questions about why investors are outraged.
In terms of technical analysis, you can see that the variable pivot point is 1.1745 coordinates. Relative to it there was a reverse price movement in the area of 1.1860. So the recovery relative to the decline in the period of November 9-11 has an impressive scale but here the main role is played by speculation, which will continue to manifest itself in the market until the circus with the elections ends.
Thus, though there is a technical and fundamental justification for the decline, the market may behave differently, depending on the incoming information.
As for the market dynamics for November 13, this is an anomaly. Daily activity was only 38 points, which is 52.5% below the average level. Practice shows that a sharp decline in volatility leads to the accumulation of trading forces and this leads to an acceleration in the market. The last time such a large-scale decline in activity was observed on the day before the election, November 2, after which there was an acceleration. Whether there will be a repeat of the scenario, with a high probability but perhaps on a smaller scale.
Looking at the trading chart in general terms (daily period), you can see that the price fluctuation over the past month has had high dynamics but the medium-term remains on the market.
Today, in terms of the economic calendar, we do not have statistics for Europe and the United States. Speculators will continue to track the information flow on burning topics: Trump & Biden, COVID, Brexit.
Analyzing the current trading chart, you can see that the variable resistance was at 1.1870, relative to which the upward cycle from the support level of 1.1745 slowed down and as a result, there was a pullback to the mirror coordinate of 1.1810.
As long as the quote is above the 1.1810 coordinate, the risk of a subsequent upward movement towards the local maximum of November 9 - 1.1920 remains.
The picture may change if the price is fixed below 1.1810 in the four-hour period, which may lead to the resumption of the downward tact of the beginning of the past week.
An additional risk for traders is the ambiguous information noise about the verbal showdown between Trump and Biden, which puts pressure on investors and provokes speculators to chaotic jumps depending on the incoming information.
Indicator analysis
Analyzing a different sector of timeframes, it is clear that the indicators of technical instruments signal a purchase, where the minute and hour intervals are focused on the fact that the price is fixed higher than 1.1810 but the daily ones work on the inertia of the beginning of the month.
The volatility for the week / Measurement of volatility: Month, Quarter, and Year
The measurement of volatility reflects the average daily fluctuation calculated for the Month, Quarter, and Year
(November 16 was based on the time of publication of the article)
The dynamics of the current time is only 54 points, which is 32% below the average level, but can still change due to the high coefficient of speculative operations.
Key level
Resistance zones: 1,1910; 1,2000***; 1,2100*; 1,2450**; 1,2550; 1,2825.
Support areas: 1,1810*; 1,1700; 1,1612*;1,1500; 1,1350; 1,1250*;1,1180**; 1,1080; 1,1000***.
*Periodic level
**Range level
***Psychological level
The material has been provided by InstaForex Company - www.instaforex.com