Likely trends related to the U.S. elections 2012

Written by Icee2010

This Article is written only for study purposes. Here my studies are carried out based on the assumption-history repeats, it doesn’t mean that same supposed to happen in future….based on historical data….this is one kind of prediction and likely trend forecasting…..

Traders will be closely watching the outcome of upcoming US election this November…Americans will decide whether to elect Democratic President Barak Obama to a second term or Republican challenger Mitt Romney, the outcome will undoubtedly have a sustained effect on the world’s financial market.

First, we’ll have a look at previous Presidents and their representing parties from 1980

From 1980, out of 8 times…Republicans ruled 5 times and Democrats ruled 3 times.

Based on this, we compare EURO/USD….Trend

From 1980 to 1992 – Republican’s time…..In this 3 terms, EUR/USD registered Low in Reagan’s (Republican) presidential regime, and Euro continuously fell and registered new lows in his 4year…1^st term president elections.

In his 2^nd term elections, the scenario is entirely different; the same pair continuously registered new highs in his next 4-year term in the year 1984- 1988.

For term 1988-1992….In the regime of Bush (sr..)…EUR/USD registered new highs…..

In continues 3 term, Republicans regime, One time EUR/USD registered new low as well as new high…in span of 12 years time……..

Where as next eight years of Democratic regime (from 1992-2000)…..this pair started falling with small corrections…i.e. in this 2 terms…..the pair registered term lows…..

Whereas in 2000-2008, in the regime of Republicans headed by Bush (jr)….EUR/USD registered peaks……in each term…..

This clarifies….Republicans regime out of 5 times….only one time lows registered in the particular term….rest 4 times peaks were registered….i.e. one term Bearish and 4 terms Bullish…..

Whereas in the regime of Republicans….The trend is bearish….and registered lows in the particular terms….

(click to enlarge)

Findings:

1. Republicans vote EUR/USD…..utmost aggressive steps taken in the economy reforms.
2. 2^nd term 2^nd quarter is key…..reversal chances
3. In the past 30years….out of 8 election cycle….from 1^st November to 1^st February, has only risen once….i.e. from November 1^st to February  1^st, out of 8 times, 7 times EUR/USD has fallen @ more than 125 pips per month…no matter which party wins the election.
4. Out of Democratic Party regime…..majority of drop trend occurred in last 2 years….of each term.

Conclusion:

• If Democratic candidate Barak Obama is re-elected, the past trends of EUR/USD suggest that maximum chance of weaken for next four years and the final drop trends may occur in last 2years of the term. There may be good opportunities to go on long EUR/USD exposure in next couple of years…after rechecking with 1^st quarter end….one may get very good opportunity to go on long EUR/USD…. any how the readings suggested that whichever party comes to power out of 8 terms, 7 times in 1^st quarter, this pair dropped more than 125 pips a month.
• On the other hand, if Romney elected as president, then altogether it’s a different trend, we can see EUR/USD strengthen for next four years.

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