The US dollar index remained strong at 105.12, gold fell sharply and was struggling at $2,663, and Bitcoin soared to $76,400, setting a new record high. The price of the currency then fell back to $75,700 and fluctuated. Donald Trump defeated Harris and won the US presidential election for the second time. The Republican Party is preparing to establish a national reserve of Bitcoin. Billionaire Musk posted a photo with Trump's family and exposed the key reason for Trump's victory. The Republican Party controls the Senate, and the fate of the House of Representatives is still uncertain.
Trump wins presidential election: Republicans control Senate, House hangs in the balance
Bloomberg reported that Trump defeated Harris and won the US presidential election for the second time, and Americans, traders and world leaders are evaluating the result. Harris called Trump to congratulate him. In a conceding speech at Howard University, her alma mater in Washington, Harris struck a positive tone and said she would continue to fight for issues that parted ways with her opponent, such as reproductive rights.
Trump's vote support rate has increased significantly in this election. In counties where more than 90% of precincts reported results, Trump's vote share in 2,538 counties increased compared to 2020. Harris only outperformed President Biden in 288 counties.
The two swing states of Arizona and Nevada have not yet been announced, but Trump has swept the other five key states.
With control of the House still unclear, Republicans who will take the Senate majority from Democrats are already setting their agenda.
Even if Democrats control the House, the bipartisan consensus is that Trump will go further and achieve his goals more effectively than during his previous presidency.
Stocks hit all-time highs, U.S. Treasury yields jumped and the dollar had its best day since 2022 on Wednesday as traders prepared for the possibility of Trump's return and Republicans winning both chambers of Congress.
JPMorgan Chase economists adjusted their outlook for the Federal Reserve after the election, predicting that the Fed will slow the pace of rate cuts in 2025.
Republicans prepare to establish a national Bitcoin reserve Musk reveals key reason for Trump's "election victory"
Republican Senator Cynthia Lummis of Wyoming sent an important signal on Twitter, writing: "We will build a strategic Bitcoin reserve."
Musk reposted a photo with the Trump family and wrote: "The whole team."
He went on to quote David Sacks, noting: “Why did Trump win? This election reminds us that after all the manufactured drama and overheated rhetoric, politics is still about issues. Whether you agree with him or not, Trump’s campaign was based on issues like the border, inflation, crime, and war.”
“Harris campaigns on vibes, celebrity endorsements, name-calling, debunked hoaxes, and platitudes. She won’t defend Biden and Harris’ records or say what she would do differently. When she speaks on specific issues, they are often stolen from Trump. On the one issue where Democrats have the upper hand, abortion, Trump cleverly preempted the issue by rejecting a national ban and removing problematic language from the Republican platform. Harris dragged on the issue by blatantly lying about Trump’s positions and demonstrating the extremism of her own party.”
The opinion mentioned an important signal: "Trump expanded his alliance with MAHA (health) and DOGE (government efficiency), while Harris ended her sham campaign by demonizing her opponent with all her might and pretending that Madison Square Garden was a Nazi convention. Even if you disagree with the results, the fact that voters saw through it should be reassuring. Voters want to know how candidates will make their lives better, and, increasingly, they are learning to regard other things as noise. While traditional media have made excuses for Trump's victory and discredited voters' motives, the reason is simple: Trump is the candidate who directly expresses voters' concerns."
It is worth noting that Trump promised to invite Musk to join the government after winning the election to lead the operation of the new DOGE department. As Trump is about to start his second term, the market is closely watching Musk's move to join his team.
'Trump deal' drives dollar higher
The dollar, U.S. Treasury yields and U.S. stock futures rose overnight, supported by the so-called "Trump trade", as markets had long anticipated a Trump victory.
That means inflation will be higher during a Trump presidency than it would otherwise be, forcing the Fed to keep policy restrictive for longer.
Historically, the dollar has benefited most during administrations with a Republican president, a Republican Senate and a Democratic House of Representatives.
The two-day FOMC meeting begins on Wednesday and is expected to end with a 25 basis point rate cut.
Despite the distortions in employment data, the U.S. economy is still growing strongly and the labor market remains solid. The ISM services PMI in October performed well, reflecting strong consumption after entering the fourth quarter.
US Dollar Technical Analysis
FXStreet analyst Patricio Martín said that the US dollar index soared to a multi-month high driven by bullish technical indicators. The relative strength index (RSI) and moving average convergence divergence (MACD) are close to overbought areas, indicating that a short-term correction may occur.
Wednesday’s significant price action suggests that the market will enter a consolidation phase before any further gains. Key support levels are located at 104.50, 104.30, and 104.00, while resistance levels are located at 105.50 and 106.00.
Gold Technical Analysis
Bruce Powers, an analyst at FXEmpire, said that gold prices fell sharply on Wednesday after the U.S. presidential election, falling to a low of $2,652. Gold prices fell below the initial support of the 20-day moving average at $2,714, as well as the previous trend high and the top of the bull flag pattern at $2,686. Currently, gold prices continue to trade near the day's low and are likely to close in the lower quarter of the day's price range.
Given the acceleration of downside momentum on Wednesday, gold appears to be retesting support at the 50-day moving average near $2,638, or even lower. The next downside pivot is located at the bottom of the bull flag at $2,600. This low is also a higher swing low and is therefore part of the recent uptrend price structure. If it fails to hold support and gold prices fall, the trend structure will be damaged, providing another bearish signal.
Nonetheless, the higher 50-day MA has a good chance of finding support. In early July, natural gas prices traded below this line for about 17 days, and the 50-day MA was reclaimed. After the subsequent rebound, the pullback successfully tested the support near the 50-day MA and several small swing lows were made. After testing the 50-day MA on August 5, the bull trend accelerated, and the faster 20-day MA began to establish support for the uptrend.
The market also considers an ascending parallel trend channel, the lower line of which begins at the mid-February swing low. The parallel lines of the trend line are then connected to where multiple highs and lows intersect this line, as shown by the red and green arrows in the figure. The market then confirmed resistance near the top channel line near the September high, and then again at the recent all-time high of $2,790.
The move to new highs suggested that gold could break out of the channel, but of course, given today's bearish price action, that breakout failed. Now that the bullish breakout has failed and key 20-day moving average trend support has been broken, there is always the possibility that gold could fall to the downtrend line of the channel. A move to that line would determine whether gold will test the swing low of $2,600.
As mentioned again before, last week's weekly candlestick pattern (not shown) was bearish. Gold closed with a doji pattern, breaking below last week's low of $2,725. Wednesday triggered the decline, and the subsequent bearish performance was probably expected from this weekly pattern.
Bitcoin Technical Analysis
CoinTelegraph noted that Trump's victory is positive because the cryptocurrency industry hopes that the new president will deliver on his promises to the cryptocurrency community throughout the campaign. Markus Thielen, head of research at 10x Research, said that the price of Bitcoin could soar to $100,000 by the first quarter of 2025.
The cryptocurrency rally is not limited to Bitcoin, memecoin has been outperforming, indicating that market sentiment is at risk. The total market value of memecoin exceeded $67.5 billion, close to the high of $69.8 billion on April 1.
Although the market sentiment has turned bullish, bears are trying to stall the gains, so a shock wave cannot be ruled out. What are the important support and resistance levels to watch out for Bitcoin and major altcoins?
Bitcoin surged above $75,407, suggesting that bulls are trying to establish their dominance. The upsloping moving averages and the relative strength index (RSI) in the positive territory suggest that bulls have the upper hand.
If the price sustains above $73,777, it will signal the start of the next uptrend. A breakout of this range will have a target objective of $93,554.
Time is running out for the bears, and if they want to stage a comeback, they will have to quickly pull Bitcoin back below the 20-day exponential moving average at $68,808. If they do so, it will indicate that the breakout could be a bull trap.
