HomeContributorsFundamental AnalysisUSD Growing in Anticipation of Tax Cut Approvals in the US

USD Growing in Anticipation of Tax Cut Approvals in the US

The EUR/USD kept falling on the background of hopes linked to successful negotiations on tax cuts in the US. If the bill on fiscal stimulation passes, we are likely to see further strengthening of the USD against other major world currencies. The news on the strong GDP growth in the Eurozone by 0.6% in the fourth quarter was not able to change the mood of traders. Trader activity is also restrained by the expectation of the release of important data on the labor market in the US that will impact the FOMC decision on the rate hike at its next meeting. Positive statistics are likely to raise the bullish sentiment on the market, which will support the EUR/USD bears.

The Canadian dollar has weakened despite the recent hawkish rhetoric of the Bank of Canada during yesterday’s statement on monetary policy, according to which the growth in investments and wages are among positive factors that may lead to a rate hike during 2018. In 2017, the key interest rate in Canada was increased twice and is currently at 1.0%.

The AUD/USD remains under pressure from unexpectedly weak trade balance data in the country, according to which the trade surplus was only 0.11 billion in October against the 1.37 billion forecasted. Volatility is likely to remain high due to tomorrow’s release of trade balance data in China which traditionally has a significant influence on the AUD/USD quotes. Today we should also pay attention to the reports on the Japanese current account balance and GDP growth at 23:50 GMT.

EUR/USD

The EUR/USD price keeps moving along the upper limit of the local descending channel. The closest targets in case of maintaining the current impulse will be at 1.1730 and 1.1620. In order to change the bearish trend, the price needs to fix above the 1.1800 mark. In this scenario, the closest goals will be located at 1.1825 and 1.1925.

USD/CAD

The USD/CAD quotes are growing fast after an unsuccessful attempt to fix under 1.2665. Gaining a foothold above 1.2000 may be the basis for price growth up to 1.2915 and 1.3000. At the same time, we do not exclude the rollback on the background of profit taking with the fall potential to SMA100 on the 15-minute chart.

AUD/USD

The AUD/USD quotes fell to the strong support at 0.7520 and after a sharp decline, we may see the price rebound to the 0.7550-0.7565 range. The MACD signal line on the 15-minute chart has changed direction to positive, which together with the RSI on the 15-minute chart being near the oversold zone, may result in an upward correction. In case of the price declining lower than 0.7500, the next objective will be at 0.7440.

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