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The Dollar’s Fate Is In The Hands Of The U.S. Tax Reform Bill

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Dear Traders,

U.S. inflation data, at the end of the day, did not have a major impact on the U.S. dollar with the greenback ending the trading day virtually unchanged against the euro and British pound. The EUR/USD soared to a high of 1.1860 before it fell back below 1.18. Our assumption of a slight extension of gains in the EUR/USD has proved correct but the sharp intraday reversal could cause euro bulls to run out of breath now. While the 1.1910-Level remains a crucial resistance on the topside, the euro could now struggle to overcome the 1.1805-hurdle. If the single currency is able to stabilize above 1.18 we may see a run for 1.19 but with bullish momentum running out of steam the euro may head for 1.1730.

Euro traders should keep an eye on the Eurozone Consumer Price report due at 10:00 UTC, which could have a minor impact on the euro’s price action.

The current price action in the GBP/USD frays the nerves of day traders. The pair trades without any discernable direction and for traders looking to assign a directional approach, we recommend waiting for price breakouts either above 1.3270 and 1.3350 or below 1.31 and 1.3020.

Sterling traders should pay attention to a round of Bank of England speakers including BoE Governor Carney who is scheduled to speak at 14:00 UTC.

Apart from market-moving topics like Brexit and monetary policy, the fate of the U.S. dollar is in the hands of the U.S. tax reform. Today, the House will vote on its tax-overhaul bill, aiming to take the most concrete step toward overhauling the American tax system. House Republicans aim to get the tax reform done by year-end and that is exactly what dollar bulls want to see. How the dollar will trade in the near-term could therefore hinge on the outcome of today’s vote.

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USD Dips On Concerns Over Tax Cut

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Dear Traders,

We finally saw larger market swings Thursday with the EUR/USD finding directional bias toward the North.

The catalyst for the weakening USD was news the U.S. Senate would delay tax cuts to the corporate rate until 2019 and while a delay is not what dollar bulls want to hear right now, they sold dollars on the news.

EUR/USD: We got the price breakout we were looking for in yesterday’s technical analysis. After the break above 1.1605 the euro gained ground against the dollar and rose towards 1.1655. If the euro breaks above 1.1660 we may see a run for 1.1685 and possibly the crucial resistance zone of 1.17-1.1730. On the bottom side, we focus on dips below 1.1570 and 1.1550, that could reinvigorate fresh bearish momentum.

GBP/USD: The price action in the cable remains messy. As long as there is no directional bias, traders may have to struggle with false breakouts. We are still looking for profitable price breakouts either above 1.3165 or below 1.3090.

U.K. Manufacturing Production figures are scheduled for release at 9:30 UTC and could have a minor impact on the pound.

From the U.S. we have the University of Michigan Consumer Sentiment due for release at 15:00 UTC but this report is not expected to have a major impact on the dollar.

We wish you good trades and a beautiful weekend.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts https://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service https://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co