The outcome of the US midterm elections is shaping up in line with our and prevailing market expectations. The Democrats are set to win the seats needed to gain control of the House of Representatives for the first time since 2010, while the Republicans will keep the Senate.

The Democrats will now head House committees that can investigate the president's tax returns, possible business conflicts of interest and possible links between his 2016 election campaign and Russia.

The Democrats also could force Trump to scale back his legislative ambitions, possibly dooming his promises to fund a border wall with Mexico, pass a second major tax-cut package, or carry out his hardline policies on trade.

EUR/USD went up after U.S. midterm elections, in line with our expectations. EUR/USD bulls tightened their grip with a daily close above the 1.1423 Fibo, a 23.6% retrace of the 1.1815 to 1.1302 (September to October) fall, with their attention firmly on the upside. The 30-day MA at 1.1481 breached, a close above will be very bullish. The next resistance level is 1.1498 Fibo, a 38.2% retrace of the same 1.1815-1.1302 fall. We remain long.

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