EUR/USD opens in a bearish gap to 1.1898 low post Merkel's disappointing victory

EUR/USD is currently trading at 1.1909, down -0.41% with a high of 1.1910 and a low of 1.1898, a bearish opening gap open fuelled by the, 'buy the rumour sell the fact', trade on the back of the expected German election and Merkel victory.

However, adding to the supply is the fact that the results were disappointing as is the loss of support for Merkel's party. "All smaller parties have done better across the board, in detriment of the aforementioned Merkel's CDU/CSU alliance", noted Ivan Delgado, chief editor at FXStreet. 

As reported by Politico: "Broadcaster ARD’s exit poll shows that Angela Merkel’s CDU/CSU alliance lost 9 percentage points compared to the last election in 2013, while the SPD lost 5.7 percentage points." 

However, Merkel's party still have the advantage to govern, and she said, “We don’t need to beat about the bush, we had hoped for a better result. But we should not forget that we had a very challenging parliamentary term behind us. We now have the task of forming a government."

German election: Merkel must form coalition, rise of far-right AfD poses big challenge

Next on the horizon are the German IFO September survey in European Monday's session. We also have ECB's Draghi will also testify about the EZ economy and monetary developments before the European Parliament Economic and Monetary Affairs Committee on Monday.

EUR/USD levels

Technically, the daily outlook remains bearish with the long upper wicks on the daily sticks while a doji forms on the monthly sticks. In the 4-hour chart, the outlook is neutral underpinned by a neutral close for the week with technical indicators stagnant just below their mid-lines with trend support at 1.1850 compelling.