Euro Posts Modest Gains Against US Dollar Ahead of US Midterm Elections

• The Euro edges up against the US Dollar as markets turn cautious before the US midterm elections.
• A 70-72% probability of Democrats winning both the House and the Senate is indicated by ING.
• US JOLTS Job Openings and preliminary Eurozone HICP figures are also on investors’ radar.

Caution ahead of the United States (US) midterm elections later on Tuesday weighs on the US Dollar (USD), giving EUR/USD a modest lift. During the European trading session, the Euro (EUR) is marginally firmer against the US Dollar at around 1.1195.

Meanwhile, the US Dollar Index (DXY) is slightly weaker near 101.73 at the time of writing. The index tracks the Greenback against a basket of six major currencies.

Could a Democrat sweep in the US midterms weigh on the Dollar outlook?

For ING’s Chris Turner, this week’s principal event risk for FX is the US midterm elections. He points out that betting markets now assign Democrats a “70-72% chance of taking both the House and the Senate.” In his view, “one could make the case that the Dollar should come lower on such an outcome,” since a clean sweep by Democrats would likely “lead to gridlock on the debt ceiling, a prolonged government shutdown next year and could encourage President Trump to pursue an even more activist foreign policy agenda.” With DXY around the 102.00 area, Turner suggests investors will weigh those political risks against factors that continue to support the Dollar: robust US growth, inflation above target and continued Fed tightening.

September’s JOLTS Job Openings report is next on the economic agenda, with publication scheduled for 15:00 GMT. Estimates suggest US employers advertised 7.13 million new jobs, marginally above August’s 7.097 million.

For the Eurozone, attention is on Wednesday’s preliminary Harmonised Index of Consumer Prices (HICP) release for October. The figures are expected to materially influence expectations for the European Central Bank’s (ECB) monetary policy.

Headline HICP growth is forecast to have held at 3.9% year-on-year (YoY), a faster pace than September’s 3.8%. Excluding volatile items such as food, energy, alcohol and tobacco, core HICP is projected to remain unchanged at 2.5% YoY.

EUR/USD Technical Analysis: Can the Pair Overcome Near-Term Resistance?

A near-term bearish bias persists on the daily chart, where EUR/USD stands at 1.1187, below the 20-day exponential moving average (EMA) of 1.1214. Continued trading beneath this short-term trend indicator suggests that upside attempts remain constrained. At around 42, the Relative Strength Index (14) points to easing downward pressure, though it does not indicate oversold conditions.

To ease the prevailing bearish tone and open the way for a more constructive recovery, the pair would need a sustained move above immediate resistance at the 20-day EMA of 1.1214. As the current dataset does not identify clear nearby support levels, traders may focus instead on price behaviour around recent lows to assess whether selling pressure returns or consolidation takes hold.

(The technical analysis of this story was written with the help of an AI tool. Learn more.)