EUR/USD continues to edge lower below 1.18, turns negative on the week
|- Tax reform hopes push DXY higher on Friday.
- EUR/USD fails to stay above the 1.18 mark.
- 10-year T-bond yield is up 1%.
The EUR/USD pair came under pressure in the early NA session on Friday and continued to erase Wednesday's FOMC-inspired gains. After breaking below the 1.18 mark, the pair refreshed its daily low at 1.1750 and was last seen trading at 1.1756, losing 0.2% on the day.
Earlier in the session, Representative Kevin Brady, chairman of the tax-writing House Ways and Means Committee, told reporters that they were working on some final adjustments of the bill and would announce it later today. Brady further added that they were going to expand the child tax credit in order to get the support of two Republicans Senators who yesterday said would vote 'no' on the bill. The US Dollar Index, which stayed in a tight range near mid-93 for the majority of the day, gained traction and touched the 94 mark. As of writing, the index was at 93.94, up 0.32% on the day.
The improved market sentiment pushed the 10-year T-bond yield higher on Friday as well, providing an additional boost to the greenback. With central banks' meetings out of the way, investors are likely to remain focused on the developments surrounding the tax bill.
On Monday, the only noteworthy data will be the CPI from eurozone, which is expected stay unchanged at 0.1% and 1.5% on a monthly and yearly basis respectively. Despite Wednesday's sharp surge, the pair is looking to end the week in the red following yesterday's and today's fall.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet, writes, "the pair is currently trading mid-way between its weekly range, also around the 23.6% retracement of its latest daily decline, which adds to the bearish case for the upcoming days. The immediate support is the mentioned 1.1710 region, followed by 1.1660. A break below this last could lead to a test of November low at 1.1550. An immediate resistance is the 1.1800/30 price zone, followed by the stronger 1.1870 area. Beyond it the pair could turn bullish, moreover it somehow it settles above 1.1930."
- EUR/USD: Stand off? - Rabobank
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.