The pair will likely remain in this range today as the markets wait for the official German election results.
The EUR/USD pair was little changed in morning hours as the market reflected on the German election and the potential power vacuum. It is trading at 1.1722, which was slightly above Friday’s low of 1.1700.
Germany conducted its election on Sunday that produced no clear winner. In the aftermath of the election, Olaf Scholtz and Armin Laschet both claimed victory. A public broadcaster put Armin’s Social Democrats party in the lead with a 25.8% lead.
Still, what is evident is that the country will likely spend a few days or even weeks before knowing who will replace Angela Merkel who has been in power in the past 16 years. Also, the results mean that the country will have a three-way coalition. Forming the coalition will likely take months as the main parties bridge their many differences.
The EUR/USD pair reacted mildly to the election results because they were in line with what most polls had predicted. Also, there is a likelihood that the policies of the likely leader will not have an immediate difference with those of Angela Merkel.
Meanwhile, in the United States, the market will reflect on the ongoing debt ceiling negotiations as the September 30th deadline nears. Divisions have emerged among Democrats on how to raise the debt ceiling.
Most Republicans have said that they will vote against any bill to raise the debt ceiling. If a breakthrough is not reached, there is a likelihood that a government shutdown will happen. At the extreme zone, the US Treasury will struggle to pay the country’s debt, which will affect its credit rating.
The EUR/USD pair will react to the latest American durable goods order numbers. These are important numbers that provide a gauge of the country’s economy.
The EUR/USD was in a tight range in the morning session as investors reflected on the outcome of the German election. It is trading at 1.1725, which was below last week’s high of 1.1750. On the four-hour chart, the pair moved to the middle line of the Bollinger Bands and is slightly below the Ichimoku cloud.
At the same time, the MACD indicator has been on an upward trend. Therefore, the pair will likely remain in this range today as the markets wait for the official German election results.