USD/CHF falls to 2-week lows due to the US tax reform

The USD/CHF ended the day with limited movements in a range with a bearish break. During the US session, a fall on the dollar board sent the pair to 0.9920, the lowest level since October 26.

Senate news disappointed market participants. The Republicans plan includes a delay in the anticipated tax cut for corporations until 2019. The Dow Jones fell 0.55% after having fallen to 0.9%. Gold rose again to daily lows, and the 10-year yield fell from 2.34% to 2.32%. The US dollar index fell to test the 94.25 area.

Meanwhile, in Europe, the president of the Swiss National Bank, Thomas Jordan, repeated that the Swiss franc is significantly overvalued and added that the central bank still has room for maneuver in its policy. His words were not a surprise.

Does the correction start?

USD/CHF is falling around 60 pips, enough to be the worst performance in almost two months. The fall brought the price below the relevant short-term technical levels and could indicate more correction in the future. The dollar did not recover at the end of October above 1.0015 and in November it showed difficulties to stay above the parity level.

The immediate target seems to be the 20-day moving average at 0.9905. Below that level, the next strong support is seen at 0.9840. If the pair rises significantly above 0.9940 it would fall back to the previous trading range.

EUR/USD falls towards the 1.1630 zone in the European opening

After having risen in the American session yesterday to one-week highs close to 1.1655, the EUR/USD has begun this Friday operating in a consolidation phase around 1.1650, but in the European opening has suffered a setback that has led to test minimum intraday close to 1.1630.

The euro yesterday gained some traction after the good forecasts of economic growth published by the European Commission for the euro zone. For its part, Trump’s tax reform plan yesterday passed the pitfall of the House of Representatives, but must still be approved by the Senate, which works on a version that differs in several important points, which could delay the implementation of the plan until 2019.