Euro posts modest gains against US Dollar ahead of US Midterm elections

• Ahead of the US midterm elections, caution weighs on the US Dollar and the Euro edges higher.
• A 70-72% probability of Democrats winning both the House and the Senate is cited by ING.
• US JOLTS Job Openings and the Eurozone’s flash HICP figures are also on investors’ radar.

1.1195 is the approximate level for the Euro (EUR) against the US Dollar (USD). The currency is marginally firmer in Tuesday’s European trading session. Pressure on the US Dollar is lifting EUR/USD as markets turn cautious before the United States (US) midterm elections later in the day.

Near 101.73 at the time of writing, the US Dollar Index (DXY) is slightly weaker. The index measures the Greenback against six major currencies.

70-72% odds of Democrat sweep cloud US Dollar outlook

Betting markets assign Democrats a “70-72% chance of taking both the House and the Senate.” ING’s Chris Turner highlights that assessment as he identifies the US midterm elections as this week’s main event risk for FX. In his view, “one could make the case that the Dollar should come lower on such an outcome,” since a Democrat sweep would likely “lead to gridlock on the debt ceiling, a prolonged government shutdown next year and could encourage President Trump to pursue an even more activist foreign policy agenda.” Turner suggests investors will balance those political risks against factors that continue to support the Dollar: robust US growth, inflation above target and further Fed tightening, with DXY around the 102.00 area.

September’s JOLTS Job Openings release is due at 15:00 GMT, making it a focus on the economic calendar. Estimates put fresh jobs posted by US employers at 7.13 million, a modest increase from August’s 7.097 million.

Wednesday brings the Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) figures for October. Investors expect the release to materially influence expectations for European Central Bank (ECB) monetary policy.

Forecasts suggest HICP growth remained at 3.9% year-on-year (YoY), above September’s 3.8%. Excluding volatile food, energy, alcohol and tobacco components, core HICP is projected to hold at 2.5% YoY.

1.1187: EUR/USD Technical Outlook

At 1.1187 on the daily chart, EUR/USD retains a bearish near-term bias. Spot remains below the 20-day exponential moving average (EMA) of 1.1214, indicating that this short-term trend measure continues to limit rallies. Around 42, the Relative Strength Index (14) suggests selling pressure is easing, although it does not indicate oversold conditions.

The 20-day EMA at 1.1214 provides immediate resistance. Only a sustained move above it would soften the prevailing bearish tone and open the way for a more constructive recovery. The current dataset offers no clearly defined support levels nearby. Traders may therefore assess price behaviour around recent lows for signs that selling momentum is returning or consolidation is taking hold.

(The technical analysis of this story was written with the help of an AI tool. Know more.)