EUR/USD: Levels, Ranges, Targets

Trump’s Tax proposals are clear for votes in the Senate and House but most specifically Republican Senate majorities are Filibuster proof. Filibuster proof means thanks to Dirtiest Democrat Harry Reid to invoke the Nuclear Option because Republicans wouldn’t allow Dem Fed judges a vote, passage of bills and Political appointments only need a simple 51 vote majority. Previous 60 votes were required to invoke Cloture and stop a Filibuster. The Republicans are not only not changing the Nuclear Option but its a gift as the Democrats thankfully shot themselves in the foot. The Democrats received a few Federal Judges and appointments on the Labor Relations Board while Trump enjoys 4 years of simple majority votes at his disposal.
Mnuchin is “studying” taxes and might be ready for proposals by the August recess. I interpret Mnuchin as putting forth one large tax package to cover personal and corporate taxes. But he’s setting up the political system in a do or die showdown and the political system in America doesn’t work well in do or die situations. Mnuchin would be better served for markets , America and DXY if he passed smaller tax bills in quick succession. One month propose corporate taxes then individual the next month and scale down the IRS in the next bill.
The longer Republicans wait and study then the longer it will take for passage and Democrat opposition to mount. All Trump brings to the table for now is hope, promise and optimism yet passage of a tax bill in August wouldn’t filter through to the economy until minimum December 2017. On the other side of the table is the economic destruction of the Democrats while the economy and markets are held hostage against dueling ideologies. If this story was a novel, it would be a best seller but the situation is real. Historically, markets are always better and prosperous under Republicans.

EUR/USD. Today’s range 1.0702 to 1.0498. Vital points to head higher are located now at 1.0630 and 1.0685. The big point to cross and see 1.0630 is 1.0590, 1.0596 and 1.0612. A break of 1.0630 only brings rock solid resistance at 1.0647. Neither are expected to break today.
On the bottom 1.0498 will see dead stop at 1.0520, 1.0516 and 1.0512.
No range breaks in sight for EUR/USD as breaks are seen at 1.0760’s and far below at 1.0360’s. The vital point to watch in days ahead to see next 1.0400’s is 1.0503.

Brian Twomey

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