EUR/USD drops sharply toward 1.1900 as USD jumps on US tax plan

The US dollar rose sharply across the board during the last hour after the announcement that the tax plan could be released September 25. EUR/USD tumbled toward 1.1900, extending the correction that started last Friday. 

USD soars on tax plan, despite PPI 

EUR/USD moved marginally to the upside after the PPI report but continued to trade in the 1.1990 -1.1965 range. The pair broke sharply to the downside amid tax reform plan talks. It bottomed at 1.1904, reaching the lowest level in a week. 

At the moment, it trades at 1.1910/15, under pressure, down 50 pips for the day, accelerating the speed of the correction. 

US House Ways & Means Chair Brady: To release tax plan on week of Sep 25th

US: PPI for final demand rises 0.2% in Aug; goods increase 0.5%, services advance 0.1%

Levels to watch 

The pair is challenging the 1.1900 handle, below that level, the 20-day moving average that stands at 1.1885 will come into play. Support levels might be seen at 1.1865 (last week low) and 1.1820/25 (Aug 21 high / Aug 31 low).

To the upside, resistance levels might be located at 1.1945, 1.1970 (20-hour moving average) and 1.1990/95 (daily high). The corrective tone is likely to prevail as long as EUR/USD remains below 1.2000.