Good day forex traders.
It is mid week and timely for an update. In our weekly review we noted a resistance at 1.2. Bearish momentum might be inevitable.
Looking at the EUR/USD daily chart above we note that the currency pair is indeed facing significant bearish pressure. 1.18 was breached and it is critical to monitor closely if the price action would pivot or press on to the down side.
Bloomberg reports on the current situation. ”
Bloomberg dollar index headed for a six-week peak and Treasury yields jumped to the highest in two months as traders digested Yellen’s warning against tightening “too gradually.”
The greenback’s resurgence pressured the euro, giving a lift to stocks in Europe, with almost all major country benchmarks in the green. Emerging-market stocks headed for a fifth day of declines, the longest streak since May 2016.
While traders may not be fully convinced of the Fed’s willingness to raise rates again in December, the possibility and prospect of corporate tax cuts is something they can’t ignore. Trump and Republican leaders will formally announce their tax overhaul plan Wednesday, according to people familiar with the plan.
Although the announcement will just be the start of a brutal anticipated fight in Congress, stocks were buoyed by a proposal in the plan that would allow companies to write off capital expenditures for five years. The dollar received a push from the prospect of capital inflows as companies take advantage of a proposed one-off repatriation tax. ”
Long time readers will know that a hike of a currency’s underlying interest rate or even the anticipation of it would often increase demand and thus value of the currency.
Our current situation is to monitor the EUR/USD on the shorter timeframe to ascertain momentum. Trade safely.
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