The US elections that took place last week still have a serious impact on all currencies and other assets. The US dollar is making additional gains due to the tariff policy and other amendments that Donald Trump promised during his presidential campaign. These tariffs may slow down Chinese and European economies, which will have a negative impact on many currencies across the world. 

EUR/USD Is Under Pressure

The European currency is under pressure as the measures that the Donald Trump administration may take are likely to have a negative impact on European economics. According to some economists, the GDP growth may fall by 1.5%, which will make the European Central Bank switch to more aggressive expansionary steps.

The ECB cut the rate during the last meeting by 25 basis points, and according to forecasts, the European Central Bank is likely to make another 25-basis-point cut this year in December. Moreover, if the tariffs are launched by the Trump administration, we can expect more cuts in 2025, which is priced currently. 

EUR/USD fluctuates below the SMA50, which means that the downtrend continues. The closest round-number support level is at 1.0600, which was tested recently but the price failed to move lower. Currently, we can see that there are several reversal candlesticks meaning that EUR/USD is likely to start a correction. While the downtrend is still prevailing, EUR/USD may grow towards the SMA50 before the next downtrend leg.

GBP/USD: Downtrend Continues

Recent UK labor market data revealed issues as the unemployment rate grew by 4.3% against 4.1% previously, which raises a question of whether the Bank of England will be able to maintain the current rate or will have to make some more expansionary steps in the coming months. The situation is even worse with the possible tariffs from the United States that may launch another round of trade wars and slow down UK GDP growth.

On the other hand, the budget suggested by the Labour party includes higher taxes and other fiscal amendments that may stimulate inflation and the Bank of England will have to make tough decisions in 2025.

On the technical point, the currency pair remains below the simple moving average of 50, which means that sellers control the market. However, recent candlesticks show that a correction is near as we have several hammer-like patterns. Moreover, the RSI indicator leaves the oversold area, which is another confirmation of the upcoming upside movement. Anyway, we think that the upside is limited and the currency pair is likely to resume its downtrend after testing the SMA50.

AUD/USD: Bears Have Control

The Reserve Bank of Australia made no changes in the monetary policy last week leaving the Official Cash Rate at 4.35%. Moreover, according to Michele Bullock, the RBA is likely to stick to its restrictionary policy as there are risks of inflation and the labor market is in good shape. 

However, the latest news from China, the key Australian trade partner in the region shows signs of further slowdown. Additionally, new tariffs by Donald Trump may make the situation even worse. In this context, the RBA may have to act more aggressively and switch to expansionary policy in order to support economics. 

The hourly chart of the AUD/USD currency pair shows signs of an upside correction. The pair is still below the SMA50, which means that sellers dominate the market. However, RSI leaves the oversold area, which means that we are likely to see AUD/USD make an upside movement. The general downtrend is still in place. Therefore, it will be a good idea to sell or buy Lower contracts after AUD/USD tests the SMA50.

XAU/USD: Gold Loses Positions

Gold loses ground as the US dollar gains support on the results of the US presidential elections. Donald Trump has made a lot of announcements that support the US currency. While the Fed is still considering further expansionary steps, market participants are not sure that the Federal Reserve will be able to cut rates if the inflation rate rises. 

Moreover, XAU/USD loses positions due to the fact that there is no breaking news from the Middle East. Therefore, the risk-off mood is not relevant anymore as traders and investors are seeking to invest money in various types of assets.

XAU/USD hourly chart

Technically, XAU/USD remains below the SMA50, which means that bears dominate the market. However, RSI is leaving the oversold area and recent candlesticks indicate the possibility of an upside movement, which will be limited by the declining SMA50. Traders can search for short positions after the price tests the simple moving average.

Bitcoin: Trump’s Promises Push BTC Higher

The first term of Donald Trump’s presidency was tough for Bitcoin as the president of the United States called the father of all cryptos a scam. However, his opinion changed in the 2020s, and currently, the re-elected president acts as a crypto champion, which led to a major Bitcoin rally that started last week.

Moreover, Bitcoin is considered a good investment in times of political and economic uncertainties. Therefore, this rally means that a lot of investors and enthusiasts consider the current situation to be unstable and they choose digital assets to protect their investments.

When it comes to the technical aspect, Bitcoin is currently above the SMA50, which is a good indicator of the uptrend. Bulls are completely dominating the market. However, the moment of correction has come, and the price moves towards the SMA50. Moreover, RSI leaves the overbought area where it was for quite a long time. Long positions are still recommended but after BTC/USD tests the SMA50 rebounds higher.