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  • USD Has Little Enthusiasm for Tax Bill; EUR/USD, GBP/USD Gain

    From dailyfx.com

    Despite the enthusiasm in US equities around passage of the tax reform bill, the US Dollar seems to have very little to say about it. After all, since it become clear at the start of the week that the reform bill would be passed by today, the US Dollar (via DXY Index) has endured a three-day slide. The fact of the matter is that the tax reform bill should be a bonanza for corporate earnings - which are already strong and trending positive - but not necessarily for jobs growth. Realistically, most of the funds repatriated or earned via higher revenue (thanks to lower taxes) will be given back to shareholders via ... (full story)

The USD is more likely to go higher against EUR and JPY in 2018 as a result of Trump tax cuts. While this author may be right about corporate tax cuts facilitating additional dividends and stock buybacks...which got their real boost from 10 years of central bank policies, the net effect of tax cuts will be more money pumped into the U.S. and global economy and higher GDP. The real questions are how inflationary? as well as the effect on gold prices. Indeed, the FED is even more likely to continue raising rates and reducing it's balance sheet, and may even accelerate the process.
"The market can remain irrational longer than you can remain solvent"
Quoting anton.olff
The USD is more likely to go higher against EUR and JPY in 2018 as a result of Trump tax cuts. While this author may be right about corporate tax cuts facilitating additional dividends and stock buybacks...which got their real boost from 10 years of central bank policies, the net effect of tax cuts will be more money pumped into the U.S. and global economy and higher GDP. The real questions are how inflationary? as well as the effect on gold prices. Indeed, the FED is even more likely to continue raising rates and reducing it's balance sheet, and...
The dollar is going to get smashed. Like the Bush cuts, these tax cuts aren't going to pay for themselves, it will add another 1.5T deficit to the already massive US debt bomb, tax reform would have been dollar positive if the tax cuts involved some sort of cut to entitlements, but that didn't happen. The dollar was going to be weak no matter what since the deficit was projected to go up again from next year, this just made it worse.
"Where you want to be is always in control, never wishing, always trading.
I will not be surprised if the EUR ends 2017 above 1.20(maybe new high this year). Price bounced off strong W1 support, and the EUR buy frenzy is easily seen on the chart. Tax reform, hot US economy, rate differential and all other USD positive factors are(were) an obstacle for further rise. Without all these positive news, the EUR would have been already way above 1.20.

Authors above have wrong assumption that markets are driven by fundamentals. In fact, these are only speculative flows. Price dropped from 1.40 to 1.05 and will rise no matter what from 1.05 to 1.40(or somewhere else). Big money needs profits.
Quoting JakubSzalaFX
I will not be surprised if the EUR ends 2017 above 1.20(maybe new high this year). Price bounced off strong W1 support, and the EUR buy frenzy is easily seen on the chart. Tax reform, hot US economy, rate differential and all other USD positive factors are(were) an obstacle for further rise. Without all these positive news, the EUR would have been already way above 1.20. Authors above have wrong assumption that markets are driven by fundamentals. In fact, these are only speculative flows. Price dropped from 1.40 to 1.05 and will rise no matter what...
Fundamentals matter in the long run, the EUR is supported by huge trade surpluses, it would be easily above 1.4 now if it wasn't for the ECB's monetary policies.

The US dollar is a flawed currency thats backed by nothing, you can't have a strong currency with massive runaway twin deficits.
"Where you want to be is always in control, never wishing, always trading.
Stoploss hunter when little liquidity at end year??
Quoting Spec_And
{quote} Fundamentals matter in the long run, the EUR is supported by huge trade surpluses, it would be easily above 1.4 now if it wasn't for the ECB's monetary policies. The US dollar is a flawed currency thats backed by nothing, you can't have a strong currency with massive runaway twin deficits.
In the long run, this is years ahead. Nothing interesting for retail traders.
  •  Guest
  • | IP XX.XXX.14.104
One more thing and I should not tire in restating it. The Euro, Gold, GBP etc are actually in the process of falling read by MN. If you do not believe me then you will be surprised by near term down turns that will rotate out of highs with extreme dispatch and depth. Yea that is how it is playing for real.

(-_-)
  •  Guest
  • | IP XX.XXX.14.104
BTW: I think the problem dailyfx has run into right here is that they like many other analysts imported the practice of stock analysis without let from Wall Street and are applying this directly to currencies and commodities. Domestic markets (no matter how broadly patronized in terms of international buy-ins) are exactly that and so their sensibilities and of course sensitivities differ from the more internationalized markets. But of course the professional anywhere came in to match Wall Street practice. Turn that thinking on its head then in my book you start seeing straight.

The Crow (-_-)
No matter what you say,EURUSD H4 chart shows prices and starts to decline.Go back to 1.03××.Trading with Chart..Not News.Tq
Quoting asmadi78
No matter what you say,EURUSD H4 chart shows prices and starts to decline.Go back to 1.03××.Trading with Chart..Not News.Tq
lol, blind trading. This is what i say the true talent to read the future.
Quoting Guest
One more thing and I should not tire in restating it. The Euro, Gold, GBP etc are actually in the process of falling read by MN. If you do not believe me then you will be surprised by near term down turns that will rotate out of highs with extreme dispatch and depth. Yea that is how it is playing for real. (-_-)
Watch DXY, it will try to fill the gap in 1-4 December and then it will go up as there are buyers at that level. It's just currently small traders will got spanked out first. I'm not 100% sure yet but that's how the picture is.
83% of the tax breaks go to the very rich. As a rule they will not be pumping any money into the USA economy. That's why they are rich. As for corporations they will pass along profits to shareholders and buy back stock. More jobs is a republican pipe dream. Now comes the paying for the rich peoples Christmas present. Lets cut everything out of the programs and help for the not so rich. I'm curious as to how they plan to make social security an entitlement.
The market doesn't care if we are jealous of the rich, what political party anyone belongs to and - to date - it has yawned at this deficit everyone seems so bent on ensuring will destroy the dollar.

These are human emotional matters of speculation that get in the way of trading the real market.
  •  Guest
  • | IP X.XXX.105.74
All this speculation by traders? History repeats itself. Have a look at the USD price action when there have been tax cuts.....
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  •  Guest
  • | IP X.XX.4.147
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  • Story Stats
  • Posted: Dec 20, 2017 9:48am
  • Submitted by:
     Newsstand
    Category: Technical Analysis
    Comments: 14  /  Views: 6,864