The results of the elections in Germany became the main topic for the single European currency, and with a negative. And the matter is not in the results themselves, since the victory of the Social Democrats was considered in advance as the most probable development of events. We were surprised by the subsequent statements by the leader of the winning party about the need for the CDU/CSU to go into opposition. Although the party of Angela Merkel took second place. Moreover, the alliance of these two parties lasted for almost two decades. This coalition itself is perceived as a guarantee of political and economic stability in Germany. This means the whole of Europe. And the desire of the still incumbent finance minister, who will almost certainly become the next chancellor, to get rid of his former partners, generates a whole heap of uncertainties that scare investors. Another thing is that the decline in the euro turned out to be purely symbolic as a result, since it was already restrained by purely American problems.
The EURUSD currency pair managed not only to stay below the level of 1.1700, traders went over to storm the local low of September 23. In fact, the downward interest is still relevant in the market, and the level of 1.1665 serves as the main pivot point.
The RSI technical instrument moves in the lower area of the 30/50 indicator without crossing the control lines. This signals that the quote is not overheated yet.
Based on the daily period, we can see a downward cycle from the beginning of June, which is still relevant in the market.
Expectations and prospects:
Keeping the price below 1.1680 will increase the chance of a breakthrough of the local low of August 20 - 1.1665. The main volume of short positions will arise after the price has been kept below 1.1660 in the daily period.
An alternative scenario of the market development considers a natural price rebound following the example of August 20.
Comprehensive indicator analysis has a sell signal based on short-term and intraday periods due to price movement within the local low of the downtrend cycle.