The EUR/USD pair had a rather choppy session on Thursday but finally managed to finish the day near weekly tops. The US tax bill-led volatility in the US Dollar impacted the pair's movement on Thursday, albeit failed to lift the pair back above a broken support (now turned strong resistance) near the 1.1670-80 region. The Senate Finance Committee on Thursday unveiled its version of a tax plan and proposed to delay the corporate tax cut until 2019, triggering a broad-based USD sell-off.
The greenback selling pressure seems to have abated, at least for the time being, with the pair now entering a consolidation phase and oscillating in a narrow trading range through the Asian session on Friday. A goodish pickup in the US Treasury bond yields provided some respite for the USD bulls, albeit fears of a delay in corporate tax cut might continue to undermine the buck.
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Meanwhile, the shared currency was also being supported by the European Commission’s upgrade of Euro-zone GDP forecast, now foreseeing the economy to expand by 2.2% in 2017, up from its 1.7% forecast in the spring. For 2018, the projection was lifted to 2.1% from 1.8%.
From a technical perspective, the pair needs to break through the 1.1670-80 hurdle to make a good chance for additional recovery towards 1.1745-50 intermediate resistance en-route the 1.1800 handle. On the flip side, the 1.1600 handle now becomes an immediate support to defend, below which the next logical target would be weekly lows support near the 1.1555 area.
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