EUR/USD recovers towards 1.09 after tax reform announcement

The EUR/USD pair gained some bullish momentum following the announcement of details regarding the Trump's administration's tax reform. At the moment, the pair is trading at 1.0890, still down 0.4% on the day.

National Economic Director Gary Cohn in a joint press conference with the U.S. Treasury Secretary Steven Mnuchin stated that the proposed tax plan includes a 15% business percent tax rate as well as tax relief for families with child and dependent care expenses.

• Trump's tax plan: proposes reducing number of U.S. tax brackets to 3 from 7
• Cohn: Trump plan will repeal so-called death tax on estates
• U.S. Treasury's Mnuchin: Small and medium sized business also will be eligible for the 15% tax rate

Following the press conference, pressured by the falling U.S. T-bond yields, the US Dollar Index quickly reversed course and dropped back below 99. Disappointed by the lack of details, the major equity indexes in the U.S. also started to erase gains. As of writing, 10-year U.S. T-bond yield was down 0.55% at 2.316%.

Technical levels to consider

The pair faces the initial resistance at 1.0950 (Apr. 25 high), the pair could aim for 1.10 (psychological level) and 1.1065 (Nov. 8 high). On the downside, with a break below 1.0850 (Apr. 25 low), the pair could aim for 1.0785 (200-DMA) and 1.0740 (Mar. 29 low).