ForexSpirit

The US mid-term elections have been the primary focus of the markets all this week so far.

The Democrats have already won the House of Representatives, but the Senate is still too close to call (although the Democrats have won four new seats there, and it is only down to the wire in the final two seats, Montana and Virginia).

The markets factored in the Democrat potential dominance as dollar bearish on Monday this week. Since I had an entry open at around the median price level (1.27) from Friday this worked out well for me, and I closed it out for 50 pips profit yesterday morning.

On election day itself (yesterday) there was another surge in price before NY lunchtime, taking it into low Q4 territory, probably based on early exit polls showing that the strength of the Democratic challenge was being reflected across the country. Profit taking in the afternoon of the US session saw us back to high Q3 prices, where it didn’t really budge for the rest of the day.

I entered a Q3 position yesterday late evening, as more exit polls were showing that Democrats were winning plenty of seats. Asian and early London action took price back to above 1.28 for a short while, but now we find ourselves back down into Q3. I’m sure that price action for the rest of the day will react to the talking heads on TV who will endlessly discuss the ramifications of the Democrats win in the House of Representatives, and what that will mean for US businesses.