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Markets were unanimous to conceive Barack Obama's re-election as risk positive, with the U.S. dollar dumped across the board in a lively Asian session. Meanwhile, the euro turned into the strongest currency.

The euro now displays constructive technical projections vs. a rattled U.S. dollar. Traders find in the figure of re-elected U.S. President Barack Obama a handicap to regain much ground as expectations re-focus on the Fed keeping easing policies as aggressive as they been for the foreseeable future. That is, unless there's a noticeable improvement in the U.S. labor market, equating to short-term headwinds for the USD.

According to Ivan Delgado, Head of Asian Editors at FXstreet.com: "The impetus behind the EUR/USD rally has been fast and furious, and it appears to carry with it enough momentum to assume we will be back into ranging-mode, with the pair about to call the early week range break a 'head-fake' as the U.S. calls Obama the U.S. president for another 4 years.

"Overall short-term market positioning would seem to be at very neutral levels which again should suggest moderate volatility," says Sean Lee, founder at FXWW, "although EUR shorts are again the exception," the analyst adds, referring to increasing short interest from professional traders.

"The biggest position amongst professional players at the moment is short EUR," Sean says. "EUR/USD is in a short-term downtrend but seems to have found a temporary base at 1.2765," Mr Lee expands, adding: "Given recent range-trading history, confidence will not be high amongst the bears that a trend is about to develop and the possibility of a double-bottom on the short-term charts will also be unsettling them."

Sean finds "there is room for further retracements towards more solid resistance 1.2880/1.2920," the analyst concludes. Meanwhile, Valeria Bednarik, Chief Analyst at FXstreet.com, also notes that "price needs to extend beyond the 1.2880 level to be able to extend its recovery today."

In a more complete analysis, immediate resistance to the upside for EUR/USD comes at recent session highs/200 day EMA at 1.2873, followed by October 26/29/30 lows at 1.2885, and October 24 lows at 1.2920. To the downside, closest support lies at previous weekly high Monday 1.2842, followed by yesterday's NY session high at 1.2826, and recent session lows at 1.2784.

One day ahead of the ECB rate call, the next London session will deliver Spanish industrial production at 08:00 GMT, EU retail sales and autumn economic forecasts at 10:00 GMT, and German industrial production one hour later. Also, German PM Merkel will address the European Parliament in Brussels at 15:15 GMT, while the Greek Parliament will vote on new austerity measures during the day. On the sovereign EZ debt auctions front, Germany will try to sell up to €4B in short-term bills at 07:00 GMT, with U.S. 10-year yields having a beat following Obama's win, and German 10 year bonds at a 1.46% yield, near 2-month lows.

Source: U.S. Dollar Buyers Run To The Exits As Obama Wins 2nd Term