At the beginning of the new week, the dollar breathes a sigh of relief, because, after many days of anticipation and uncertainty, the US Senate has finally voted its draft tax reform. However, for President Trump to sign the bill before Christmas, there is still much to be done. First of all, delegates from both chambers of the Congress must merge two draft laws and a coherent project must win a majority of votes. The Republicans have one week to present the final draft vote. It will not be easy, because some solutions from the House of Representatives' project will weaken the minimum majority in the Senate. Since nothing is certain, you can not count on an impressive USD rally. Nevertheless, we are a step closer to success than it does and it supports the Dollar.
However, will it be possible to look forward to Friday's US labor market report in a positive mood? The market participants are anticipating a small decrease in the NFP Payrolls from 261k to 200k, together with steady Unemployment Rate at 4.1% (multi-decade low) and increase in Average Hourly Earnings from 0.0% to 0.3%. Will that anticipations be strong enough to sustain the positive mood around the US Dollar? We will soon find out.
Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market is currently moving in a sideway manner and the horizontal zone is located between the levels of 92.49 - 93.50. As long as the level of 94.20 is not clearly violated, the outlook remains bearish. A flat momentum indicator supports the sideway view.
