USD Dips On Concerns Over Tax Cut
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.
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