EUR/USD: 1.1800 – a tough nut to crack? Eyes on US tax vote

The EUR/USD pair traded weaker below 1.18 handle in the Asian trades, as the US dollar remained broadly supported ahead of the key vote on the US tax reform plan due later on Thursday.

EUR/USD trades below 100-DMA at 1.1796

The spot extended its sharp reversal from four-week tops of 1.1860 and went on to hit daily lows at 1.1769 in early trades, now consolidating the downside amid a pick-up in buying interest seen around the US dollar across its main peers, in response to the comments from the White House reporters, citing that the GOP leaders are confident they have the votes to pass the tax bill today. 

More so, yesterday’s uptick seen in the US core CPI figures also kept the sentiment around the US dollar somewhat buoyed, while a recovery in risk sentiment on the back of the rebound in the global equities and Treasury yields further added to the weight on the funding currency Euro.

Later today, the pair will get influenced by the broader market sentiment and USD price-action ahead of the US jobless claims, industrial production, and tax vote.

EUR/USD Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet, noted: “In the 4 hours chart, technical indicators are correcting extreme overbought conditions, but still far from suggesting the bullish run is over. In the same chart, the 20 SMA heads sharply higher, now about to surpass the 200 SMA after already breaking above the 100 SMA. A steeper correction could take place on a break below 1.1745, the 38.2% retracement of the same rally, while to the upside, a critical mid-term resistance comes at 1.1890. Support levels: 1.1790 1.1745 1.1700 Resistance levels: 1.1860 1.1890 1.1930.”