EUR/USD plunges amid tax reform progress
EUR/USD plunges amid tax reform progress
Due to bearish pressure exercised by the 55-, 100- and 200-hour SMAs the currency exchange rate ended previous trading session below the 38.2% Fibonacci retracement level at 1.1760. In result of this movement, the pair broke through the bottom boundaries of two junior ascending channels. Despite the minor recovery of Euro the downward movement is expected to continue, being mainly driven by optimism surrounding tax reform.
From technical perspective, the surge of the Euro should be neutralized by a combination of the above moving averages together with the updated weekly PP at 1.1777. In case these barriers are broken, the rate would still have another resistance line set up by the monthly PP at 1.1807. The opposite side, in contrast, is does not contain any notably obstacles up until support zone located between the 1.1730 and 1.1722 levels.
Due to bearish pressure exercised by the 55-, 100- and 200-hour SMAs the currency exchange rate ended previous trading session below the 38.2% Fibonacci retracement level at 1.1760. In result of this movement, the pair broke through the bottom boundaries of two junior ascending channels. Despite the minor recovery of Euro the downward movement is expected to continue, being mainly driven by optimism surrounding tax reform.
From technical perspective, the surge of the Euro should be neutralized by a combination of the above moving averages together with the updated weekly PP at 1.1777. In case these barriers are broken, the rate would still have another resistance line set up by the monthly PP at 1.1807. The opposite side, in contrast, is does not contain any notably obstacles up until support zone located between the 1.1730 and 1.1722 levels.
Despite increasingly positive stance on the Dollar, the Euro continued to inch higher yesterday, being driven by the minor head and shoulders pattern. As the currency rate managed to end previous trading session above the combination of 55-, 100- and 200-hour SMAs as well as the weekly PP, they are expected to provide support for further advance. Accordingly, the main target for the pair would an intersection of the monthly PP and the upper trend-line of a senior descending channel.
Whether the exchange rate will manage to break this barrier will heavily depend on result of today’s vote in the Congress. An adoption of tax reform might push the rate down to the 38.2% Fibonacci retracement level at 1.1760, while the opposite result is likely to elevate the rate straight to the last week high at 1.1845.