Election Day – November 8, 2016

Election Day is here and uncertainty reigns supreme as we advance into what is being though of as the most significant trading day since the UK cast its Brexit vote. We will likely see extreme volatility injections as traders buy and sell positions throughout the day with the goal of being on the right side of the trade.

Dollar bulls maintain control

Already we saw huge price gaps and jumps on Sunday night as the FBI released a report that reinforced their view from earlier this year to clear Hillary Clinton of criminality in the use of her emails , and the markets overall reacted with a stronger greenback in the wake of the news. With overall US data showing signs of stability in the economy, market sentiment toward the Greenback is overall bullish from a technical standpoint.

The US dollar index jumped .94 points on Monday, easily recovering its losses from the prior week.

US Election Possible Impact

The Presidential Election in the USA is set to begin Tuesday November 8th.  By the evening, exit polls are released and early predication are made. It is good for Forex traders to know the general consensus of where the markets may head in the event of a win in either direction.

What Would Happen To The Markets If…

…Clinton Wins

This would mean more market certainty and would be less likely to change the current market direction and trend of a strong Greenback. It would make a rate hike for December more likely to be on schedule and a likely continuation of the current status quo in the world of Forex, stocks and commodities.

…Trump Wins

This will result in more market uncertainty and a weaker USD. It may also lower the chances of a rate hike in December.

As we see the Dollar drop, investors may run to invest in Gold, a natural safe-haven and of course the Yen It is a well-known observation that at times of uncertainty in the Forex market, the Yen strengthens.

On the other hand, other currencies such as the Mexican Peso of course, will weaken.

Be Prepared

Forex traders – use extreme caution if you are trading during and immediately after the US election. We highly recommend you close all your trading positions if possible and wait until the markets settle down, which may only be some time after the winner is announced. Our ForexSignal Trading Team will not be trading until the results are more certain and the direction of the market is more clear.