USDIDX bounces off recent lows

The dollar index jumped above 110 mark, recovering from a seven-week low of 109.25 in the previous session, as investors tracked the results of a tighter-than-expected contested midterm election. The odds are still favoring Republicans to win the US House, but the Senate control still hangs in the balance as a red wave expected by analysts did not materialize. 

Aside from politics, market moods were weighed down by a massive crypto sell-off caused by ongoing concerns over insolvency of one of the largest cryptocurrency exchanges, FTX. According to the latest news, the Binance exchange will probably withdraw from the proposal to take over the bankrupt FTX because the scale of the losses exceeds its financial capacity. As a result Bitcoin briefly fell to the lowest level since November 2020, and investors fear a domino effect similar to the collapse of Luna which occurred in May. 

Also hawkish comments from Fed's Barkin also support greenback. Richmond Fed President said inflation fight 'may lead' to downturn but that is a risk the US central bank will have to take.

Tomorrow investors’ attention will focus on October CPI data, which may provide more details regarding FED tightening path. Money markets are currently pricing a more moderate 50 bp rate hike in December, but a hotter-than-anticipated inflation report could fuel bets for another supersized 75 bp increase.

USDIDX bounced off the major support at 109.25, which is marked with previous price reactions and lower limit of the 1:! structure. As long as price sits above, another upward impulse may be launched towards local resistance at 111.70. Source: xStation5

GBPUSD pair fell over 1.0% on Wednesday as investors turned to safe haven assets like the US dollar. Currently the pair is heading towards major support at 1.1290, which coincides with 23.6% Fibonacci retracement  of the downward wave launched in June 2021 and upward limit of the triangle formation. Source: xStation5