US Politics Heating Up
The outbreak of corona-virus has taken centre stage over the last week in term of news-flow and driving price action. With the spread of the virus continuing to grow more severe, developments in the US political space have understandably taken a backseat. However, there is simmering risk within the US political environment which is worth highlighting here.
The Iowa caucus is an important barometer for gauging the prospective Democratic presidential candidate. Typically, winning in Iowa has seen a roughly 30-point jump in support for that candidate. Recent polls and forecasting metrics continue to favour Bernie Sanders as the clear winner. Polls suggest that Sanders is favourite to win in three of the first four primaries ( Iowa, New Hampshire and Nevada). However, national polls continue to favour former VP Joe Biden. If Sanders wins in Iowa, however, he will likely overtake Biden in the national polls (based on previous contest) and go on to win the overall contest.
Trump Favoured For Re-Election
So far, polls continue to favour President Trump winning re-election with 49% of voters polled by Gallup preferring Trump for re-election. Despite the impeachment enquiry, Trump’s approval rating is the highest it is ever been, thanks mainly to a surge in support from Republicans (94%) as well as independents (42%). Notably, the poll was conducted during the president’s impeachment trial (Jan 16th – 29th) and found that 52% of those polled were in favour of acquitting Trump. Clearly, the evidence supplied against Trump did not do much to detract support from the controversial political leader.
While the results of the Iowa caucus were due to be announced overnight on Monday, however, there was major disruption to the schedule. A technical fault meant that the voting results were delayed due to a ”reporting issue”. According to reports, there were inconsistencies in the sets of results though this was attributed to a “reporting issue” instead of any malpractice. There were rumours that an app created to help with the reporting of results had gone down though this has been denied by those in charge.
Sanders In Second Place So Far
As of this morning, 71% of precincts in Iowa have reported. The voting results show that Pete Buttigieg is in the lead at 26.8% of the vote with Bernie Sanders a close second at 25.1%. The final results are due later today.
Trump was quick to put his usual spin on the events. Taking to Twitter, Trump called the situation an “unmitigated disaster” and said that "the only person that can claim a very big victory in Iowa last night is 'Trump'."
Trump has been un-phased by his recent impeachment trial which is due to end shortly with the Senate (controlled by Trump’s Republican party) widely expected to acquit the president.
There were some positives from the Iowa caucus. For the first time in US history, Mosques were included as caucus venues along with schools, gyms and churches which have traditionally been used. The inclusion of these venues was a big win for diversity and was applauded by the US Islamic community.
Technical View
USD Index (Bullish above 97.10)
From a technical viewpoint. The USD Index is trading back above the broken trend line from last years highs having found support at the monthly pivot at 97.10. If price continues higher from here, the monthly R1 at 98.11 will be the next upside objective with the monthly pivot providing main support.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!