The EUR/USD currency pair traded sluggishly for most of Tuesday, which isn't surprising. On Thursday, the Federal Reserve will announce the results of its meeting, and over the next few days, the new president of the United States will be revealed. Events of this scale don't happen every week or even every month. A week ago, there were almost no questions about the Fed meeting. The market expected a rate cut of another 0.25%, but the recent labor market data suggests dovish surprises could be possible. We'll discuss the Fed meeting soon, but let's focus on the U.S. presidential election.

In the market, there's a view that a Trump victory would be positive for the dollar. Most participants likely mean in the long term. If Trump wins, he will serve for another four years and certainly won't run again since that would be his third term. Theoretically, a Trump victory could support the dollar for the next four years. However, that's only in theory, as events of a global scale could unfold in the next four years, as they did over the last few years. Look at how currencies have fluctuated in recent years. Therefore, we believe it's naive to expect dollar growth simply because Trump wins.

Donald Trump may not win. Recent studies show that Kamala Harris leads by two points, while some other studies conducted in the U.S. have shown that Trump leads by one point. This tells us that both presidential candidates have almost equal support among the electorate. Therefore, it's incorrect to claim that either Trump or Harris will win. Neither candidate looks like an undisputed leader.

Moreover, counting the votes could take much longer than 24 hours. Typically, if one candidate has a lead that makes it mathematically impossible for the other candidate to catch up, preliminary results are announced, allowing for a quicker declaration. However, if the margin is as small as 100 votes, each ballot must be carefully counted. And then (we can be sure) Trump will declare fraud in certain states and claim a stolen victory. Thus, we can already anticipate recounts if Trump does not win decisively.

During all this time, the market will remain nervous and suspenseful. It's not sure that we'll see "spikes" in the market, but they are possible. On top of the election results, we'll have the Bank of England and Fed meetings, with potentially unpredictable comments from their chairs. So, this week promises to be eventful, and both major currency pairs could end up anywhere by the week's close.

The average volatility of the EUR/USD pair over the last five trading days as of November 6 is 59 pips, indicating "low" volatility. We expect the pair to move between levels 1.0861 and 1.0979 on Wednesday. The higher linear regression channel has turned downward, signaling that the global downtrend remains intact. The CCI indicator has formed several bullish divergences, warning of an upcoming correction.

Nearest Support Levels:

• S1 – 1.0864
• S2 – 1.0803
• S3 – 1.0742

Nearest Resistance Levels:

• R1 – 1.0925
• R2 – 1.0986
• R3 – 1.1047

Trading Recommendations:

The EUR/USD pair has started a correction. In recent weeks, we have anticipated a decline in the euro in the medium term, so we fully support the downward trend direction. There's a possibility that the market has already priced in all or nearly all expected Fed rate cuts. If so, the dollar has fewer reasons to fall, though it has few. Short positions can still be considered with targets at 1.0742 and 1.0681 if the price remains below the moving average. If you trade on "pure" technicals, long positions are currently relevant, with targets at 1.0979 and 1.0986. However, this is only a correction.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.