What Will Happen to the US Dollar After Joe Biden’s Inauguration?
Joe Biden will be inaugurated as the 45th President of the United States on January 20, 2019. The US Dollar is expected to have a strong showing with Joe Biden in office, so what will happen to the dollar after he takes office?
- The Dollar shows strength ahead of Joe Biden’s inauguration.
- The EUR/USD pair moved downward to test the 1.2060 level.
The Greenback posted a correction count after a huge selloff.
This correction pushed the price to the upside towards the 90.93 level, where a strong daily resistance is located. The daily resistance (90.93) rejected the price and pushed it to the downside by posting a doji candlestick below it.
From a technical view, there are two possible scenarios for the next move of the US Dollar. Either, the price will manage to break the 90.93 level (which is the least likely scenario) or we could see a potential reversal towards the 89.42 mark.
Let’s now have a look on the EUR/USD graph.
As we can see from the graph of the EUR/USD pair, the price was in a clear rally until it reached the 1.2310 level. It posted a correction count to the downside towards the 1.2076 mark, leaving an engulfing bullish candlestick behind. In addition, the price managed to break the blue trendline which signals a potential reversal in the next few days.
For the 2 weeks in the lead up to the US presidential inauguration, the US Dollar rallied which led to a huge selloff in the equity market. After the rise of the US Dollar, a decline has occurred.
This is likely due to the announcement from the Chair of the Federal Reserve, Janet Yellen as she mentioned that there may be a US stimulus of 1.9 trillion US Dollars. With a weaker US Dollar this could be reflected in the EUR/USD pair with a push to the upside.
The Biden administration has lot of challenges to face such as the trade deal with China, conflict with Iran, and of course the huge spread of the COVID-19 in the United States.
If Joe Biden succeeds in addressing these challenges quickly, we might see the US Dollar strong again.