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EUR / USD. Battlefield – Georgia

DATE OF PUBLICATION: 2021-01-06 12: 22: 52Today, the focus of traders in dollar pairs is not macroeconomic reports or even coronavirus reports. The eyes of market participants are riveted on the 10 million state in the southeastern United States, where local residents elect representatives to the Senate. In fact, the residents of Georgia have already made their choice – at the moment, the votes of American voters are being counted. This process is exciting, because: a) rivals go “nose to nose”; b) at stake is control of the upper house of Congress. Given the importance of this event, all other fundamental factors have faded into the background – at least for the dollar pairs of the “major group.” The news stream about the preliminary election results is controversial. During the Asian session, it was reported that the Republicans defended the Senate – according to The New York Times, Republican candidate Kelly Leffler won 51% of the vote, while Democrat Raphael Warnock received 48% of the vote. In another pair of contenders, Republican David Purdue allegedly beat Democratic Party representative John Ossoff by 1.5 percent. This news was calmly received by the market, since Georgia is considered one of the basic states of the Republicans – representatives of the Democratic Party have not won here for decades. The US dollar index showed a slight increase, but did not even exceed the 90th mark. In other words, if the alignment had not changed, the main dollar pairs would have been trading in the same mode, in line with the previous day. But by the beginning of the European session on Wednesday, the alignment of forces had changed. Many American publications, referring to their sources, sounded sensational news: the Democrats suddenly broke into the leadership. It is worth noting that if this information is officially confirmed and Ossoff and Warnock retain their leadership, the Republicans and Democrats will each have 50 votes in the upper house of Congress. And the decisive vote will be the vote of Kamala Harris, the elected Vice President of the United States, who, as you know, belongs to the Democratic camp, that is, it will be possible to say that the representatives of the Democratic Party will receive full power: they will control the majority not only in the House of Representatives, but also in the Senate. On top of that, the party has a democrat-president who, in this situation, will be able to implement structural reforms that require the approval of legislators. By the way, the approval of congressmen is necessary not only for the approval of laws, but also for key personnel appointments. Therefore, the “battle in Georgia” is of enormous importance – for both Democrats and Republicans. And if the former, in case of victory, will receive a kind of “ring of omnipotence”, the latter, if they lose, will no longer be able to “bargain” with the White House, using the leverage in the form of blocking bills. At the moment, 98% of ballots have been processed. According to Fox News, Democrat Ossoff is ahead of Republican (who is the current Senator) David Purdue by 3,560 votes – a mere 0.08% in percentage terms. In another pair of rivals, the gap is more significant. Current Republican Senator Kelly Lofler is 40,575 votes behind Warnock, or 1%. Most American analysts are confident that in this pair the representative of the Democratic Party has already secured a victory. But here the principle is “all or nothing”: Democrats need the victory of both candidates, so the main attention of traders is now focused on a pair of rivals Ossoff – Purdue. As mentioned above, the gap between them is 0.08%. This is also an important point in the context of further events, because if the final difference between the candidates is less than 0.5%, the loser will be able to demand a recount. As we can see, the situation is still ambiguous, and the majority of the Democrats is minimal. But the market “grabbed” the headlines, which a few hours ago began to trumpet the victory of the democratic camp. Against the background of such news flow, the dollar index collapsed to the base of the 89th figure: the last time it was at such lows was exactly three years ago, in January 2018. Major dollar pairs reacted accordingly: in particular, the euro-dollar pair jumped to the support level of 1.2350 (the upper line of the BB indicator on the daily chart), but was unable to break it impulsively. In my opinion, during the day to trade the eur / usd (as well as other dollar pairs, except for aud / usd – where the Australian has “its own” reasons for growth) is risky now, since at the end of the day the pendulum may swing towards the Republicans. And given the fact that the buyers of eur / usd “celebrated” the victory of the Democrats ahead of schedule, the corrective rollback in this case will be large-scale. Therefore, at the moment it is better not to take risks, although if the preliminary results are confirmed, the buyers of the pair will most likely approach the borders of the 24th figure. Material provided by InstaForex – Source – InstaForex

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