The long-awaited US tax overhaul bill was finally approved by Senate on Saturday and provided some early support for the US Dollar at the start of a new trading week. The EUR/USD pair opened with a 30-pips bearish gap but now seems to have stabilized around the 1.1870 region, in what could be termed as a muted reaction to the passage of tax bill amid
Meanwhile, the recent price action, especially Friday's volatile move, indicated that the pair's bullish momentum is now getting more unconvincing, despite robust economic data flow from the Euro-zone. In absence of any fresh major market-moving economic releases on Monday, the ongoing USD pull-back keeps risk tilted to the downside.
From a technical perspective, the pair now seems to have formed a descending trend-channel on hourly charts. Hence, a break below a short-term ascending trend-line support, held through November, would confirm a test of the trend-channel support, currently near the 1.1800 handle. A decisive break through the channel would confirm a near-term top formation and turn the pair vulnerable to extend is corrective slide in the near-term.
On the upside, any recovery attempts back above the 1.1900 handle might continue to confront fresh supply near the descending trend-channel resistance, currently near the 1.1925 region. A convincing break through the mentioned hurdle would negate any near-term bearish bias and help the pair to resume with its prior appreciating move, immediately towards reclaiming the key 1.20 psychological mark.
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