The US Dollar is waiting for the tax decision

Right now, the reform project is being discussed by the US Senate and the House of Representatives. Both of them agreed on the reform earlier, but what they are working on right now is a more elaborate procedure. Politicians are trying to find some kind of “middle ground”, which will later go to the President for his signature.

After another stage of negotiations between the US Senate and the House of Representatives, which eliminated a lot of doubts about the revision of federal corporate income tax, investors are pretty optimistic about the document. It is quite possible that the President may sign the reform project until the end of this week. From the very beginning, the document was planned to be signed by Christmas, that’s why we may assume that everything is going according to the schedule right now, so there’s no need to worry about it

However, there is still a risk, which lies in the attitude of some senators, and all of them, by the way, happened to be republicans. Earlier, these senators told that in their opinion the healthcare sector aspect hadn’t been negotiated properly. In other words, they are “rolling back” the negotiations. Considering that the Republicans are already in minority, it would be critical to losing supporters in their position. A special attention should be paid to Senator McCain because he was absent during the previous voting due to sickness.

This is the reason why the USD doesn’t rise as much as it could have, given the circumstances. Still, right now there is more positive news about the reform negotiations than negative. If Trump signs the document this week (remember that the USA will have holidays on December 24th and 25th due to Christmas), it will come into effect right after New Year and that’s very good for the US Dollar.

So, what is happening to the EUR/USD pair from the technical point of view? At the H4 chart, we can see that after breaking the resistance line of the downtrend channel (colored in yellow), the pair started moving upwards and reached the target resistance level of the projected channel (colored in blue). The current downtrend may reach 1.1685. However, if we take a look at the dynamics of the lows, we may assume that the instrument is starting a new uptrend. The level to confirm this “new uptrend” scenario is 1.1815, which is the resistance area of the current channel. If the pair breaks this level, it will move towards the next projected channel (colored in green) and its resistance line at 1.1890.

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.