Dollar Slides to a One-Month Low as EUR/USD Breaks Above 1.1234 Ahead of the Midterms
The range finally breaks — upward
The range this site's Forex guide mapped just hours ago has broken, and it broke upward. EUR/USD climbed to $1.1234 on Monday, November 2, up about 0.7 percent on the day, after spending the previous session coiled inside 1.1100 to 1.1220. The dollar eased about 0.5 percent against a basket of major currencies to 101.45, touching its lowest in a month, as traders trimmed dollar positions ahead of Tuesday's US midterm elections and a packed week of central-bank decisions and jobs data. The move is a clean break of the levels the guide flagged: a close above 1.1215 was the trigger that would open the way to 1.1270, and Monday's climb through 1.1234 cleared it, with the pair also moving above its 21-day moving average near 1.1197. For traders who watched the 1.1104 low hold last week and the 1.1220–1.1225 ceiling cap every recovery, Monday is the first session in days where the ceiling, not the floor, gave way.
Why the dollar is sliding now
This is position-squaring more than a verdict. Americans vote on Tuesday to decide whether Democrats can wrest control of Congress from President Donald Trump's Republican Party; Democrats are widely expected to win the House, while control of the Senate is less certain, and hedge funds suffered significant losses in October, leaving markets with little capacity to absorb an election surprise. Traders are therefore reluctant to build large positions before the result, and trimming dollar longs is the cautious trade into an uncertain vote. The rest of the week's calendar keeps the caution in place: Friday's October jobs report will shape bets on the Federal Reserve's December meeting, and central banks in Britain, Australia, Norway and Sweden all decide policy this week, with the Reserve Bank of Australia widely expected to raise its cash rate to a near two-decade high of 4.85 percent on Tuesday. Falling oil and falling US Treasury yields helped the move too: NY crude futures fell as low as $99.66 and the US 10-year yield declined into the 4.90 percent range, both of which ease pressure on the dollar against European currencies. None of this is a trend change on its own. It is a market standing aside before news it cannot price yet.
The euro's own drag has not gone away
The euro's rise happened despite, not because of, its own news. Fitch revised France's outlook to negative from stable after Friday's close, keeping the euro under pressure and leaving it near a 17-month low at $1.1182 in early Asian trading before the London session lifted it. The counterweight is growth: eurozone GDP grew 0.4 percent in the third quarter, slower than the second quarter but above the 0.2 percent forecast, which keeps a December European Central Bank rate hike in play for some analysts. The tension is visible in the levels. FXEmpire's technical read puts the Dollar Index near 101.85 on the 4-hour chart, holding the 101.54 support zone — a close below it would put 101.18 in focus, while a recovery above 102.03 would point back to 102.48. For EUR/USD, the first support on a pullback is now 1.1148, then the old range floor at 1.1104; the next resistance above Monday's high is 1.1270, with the Ichimoku base line near 1.1250 as an intermediate marker. The Relative Strength Index near 56, above its signal line, leans bullish but not stretched — there is room for the move to extend without hitting the overbought zone that would normally invite profit-taking.
The rest of the board
Sterling rose slightly to $1.3445, holding a slight bullish bias above 1.3379, with 1.3470 in view on a close above 1.3434. The yen was steady near 157.64 per dollar after rising to 157.99 in Tokyo and failing at 158.00, then slipping into the 157.60s in London. The Australian dollar was little changed at $0.7028 ahead of Tuesday's Reserve Bank decision. Bitcoin, for context, rose about 0.6 percent to around $78,262, having fallen to a six-week low on Friday — a reminder that the dollar's slide and crypto's stabilisation are travelling together this week, both waiting on the same election and jobs data. T
he practical read for Forex traders: Monday broke the range, but the breakout still needs a second day. A hold above 1.1200 keeps the bullish case alive toward 1.1250–1.1270; a fall back below 1.1200 would say the breakout was position-squaring, not a new trend, and selling on rallies returns. Tuesday's vote, not Monday's move, is the test.FAQ
Where is EUR/USD trading? Around $1.1234 on Monday, November 2, up about 0.7 percent, after breaking above the 1.1215 trigger level. Where is the Dollar Index? Near 101.45–101.85, touching a one-month low; support at 101.54, then 101.18 below, and 102.03–102.48 above. Why is the dollar falling? Traders trimming positions ahead of Tuesday's US midterms, Friday's jobs report and this week's central-bank dec
isions, helped by lower oil and Treasury yields. What is holding the euro back? Fitch's revision of France's outlook to negative; the offset is eurozone Q3 GDP growth of 0.4 percent, beating the 0.2 percent forecast. What would confirm or kill the breakout? Holding above 1.1200 keeps the path to 1.1250–1.1270 open; falling back below 1.1200 would mark the breakout as a false start.Read more on Zimbuck: https://zimbuck.com/pages/zimbucknews and join the discussion at https://zimbuck.com/groups/zimbuckmarketnews . Related reading on the site: the EUR/USD support-and-resistance levels guide in the Forex Trading category. This article is market news and general information only, not financial advice.
