US Dollar turns negative on unclear details of tax plan

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, came in under a renewed selling pressure late in the US afternoon and erased its daily gains. As of writing, the index was at 99.66, 0.05% lower on the day.

The index leaped to a new session high at 99.94 after President Donald Trump said that he will be announcing the anticipated tax reform next week, which would include substantial cuts for individuals and businesses. However, a recent report by Bloomberg suggested that next week's announcement may not include every component that will go into the final legislation and will lack a change on border-adjusted tax.

Following the Bloomberg report, the index quickly slipped back into the negative area but is struggling to extend losses as the volumes thin while we approach the end of the week. Additionally, the 10-year U.S. T-bond yield settled at 2.246%, up 0.25% on the day and helped the greenback limit its losses. Nevertheless, the index is about to close the second week in a row with losses.

Technical outlook

The index faces the immediate support at 99.30 (Thursday's low) ahead of 99 (psychological level/Mar. 28 low) and 98.65 (Mar. 27 low). To the upside, resistances could be seen at 99.95/100 (daily high/psychological level), 100.50 (Apr. 13 high) and 101 (psychological level).