Keane Insight’s…Election Trading Plan

The FX markets have remained relatively muted today despite a strong rally in USA equities.  I would expect the FX world to continue to drift sideways until an election outcome is established.  The market's reaction to a Romney or Obama victory is not as clear-cut as many would think.  An Obama victory would indicate a continuation of current USD quantitative easing and foreign policy (i.e.China Currency).  While a Romney victory proposes the possibility of a new Fed Chairman and a change in fiscal planning.  Beyond the presidential election, congressional results will also have an effect on Congresses ability to deal with the Fiscal Cliff issue.   The worse outcome for the markets would be a knotted result,  leading to weeks of uncertainty.  This outcome would most likely lead to JPY and USD safe-haven strength.

With all this being said, an Obama victory will most likely lead to dollar weakness in the short-term.  While a Romney victory could lead to dollar appreciation against the majors in the short-term.  Dollar weakness due to an Obama victory could be limited due to the run up since NFP.  Below is a detailed look at the EURUSD , GBPUSD and AUDUSD.  As always traders remember to keep your trades KEANE and play it clean.

EURUSD Resting Between the 200 day MVA and .382 Fib

 

The EURUSD has consolidated in a narrow range over the last 36 hours.  The election results will dictate the price action in this pair over the next 24 hours.  Support is created by the .382  fib at 1.2735 and daily price support at 1.2750.  Resistance rest near 1.2825 and 1.2885.   A break of the 1.2825 level could lead to a test of 1.2885, followed by the resistance zone from late September between 1.2995/1.3020.  A push below the support zone could lead to a test of the 50 Fib at 1.2602.

Sup        1.2750/35                1.2602(50 Fib)

Res        1.2825          1.2885              1.2995/1.3020

Keane plan....Election will dictate.  Looking for results plus a break of short-term sup at 1.2735 or resistance at 1.2825

GBPUSD Hugging the .382 Fib

Heading into the New York Close the GBPUSD has moved up to test the .382 fib at 1.60.  A  hold of this level places the pair once again in its range from last week between 1.6180 and 1.60.  A hold above this level, following the election results could lead to a push back towards the top of the range.  If dollar strength catches wind following the election a break of 1.5960 open the pair up to a test of the 50 Fib at 1.5903 followed by the .618 fib at 1.5808.

Sup     1.5960                    1.5903(50 Fib)                       1.5808(.618 fib)

Res      1.60                       1.6180/1.6210

Keane Plan...Election will dictate.  Looking for a hold above 1.60 or a break below 1.5960 post election results.

AUDUSD Breaks Resistance following RBA,  Waiting On Election

The AUDUSD broke above key technical resistance between 1.0386/1.0410 following the BOA decision to hold interest rate unchanged in early trading Tuesday.  A hold above this level post the election favors a move up towards daily price resistance at 1.0520.  If the pair manages to push back below the resistance zone now turned support a move back towards the 1.0250 area could be in the cards.

Sup          1.0410/1.0386               1.0250

Res          1.0520

Keane Plan....Watching the support zone between 1.0386/1.0410 post-election.

 

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