USD/CAD Daily Signals – December 28, 2017

Greenback holds support for recovery

On Wednesday, the Internal Revenue Service advisedthat not all property-tax prepayments can be deducted amongst a demand of homeowners paying their 2018 property taxes before the Republican tax law takes effect in January.

The IRS stated the property taxes that haven’t been evaluated before 2018 won’t be deductible on 2017 tax returns. The State and local law determines when the property taxes are evaluated and those dates differ by location.The IRS mentioned in its advisory “A prepaymentof anticipated real property taxes that have not been estimated prior to 2018 are not deductible in 2017”.

Many homeowners in high tax states like Massachusetts, New York and California have been struggling to compensate their 2018 property taxes before year-end in order to declare complete reduction on their 2017 tax return. But many municipalities don’t have complete 2018 property tax bills accessible. The new tax bill signed into law on Friday limits the amount that tax filers can deduct in state and local income, sales and property taxesbeginning next year at $10,000.

The equity markets wiped out gradual profits as tech sector winners exceed energy losers. The dollar bears are achieving their final drop in for 2017 possibly anticipating things to come in 2018.The bears took their reminder from the Conference Board Consumer Confidence Index which declined to its lowest level.But with only two trading days remained on the 2017 calendar, expect volumes to remain light as the New Year Party season will probably begin a bit early for equity traders and appropriately so after a seller year for US stocks.

Intraday bias in the USD/CAD pair remains bullish for the moment with the support level intact. As long as the 1.2637 support level holds, the pair’s near term outlook stays bullish and a further rise is expected. The price actions from the 1.2637 level are viewed as a consolidation pattern and see an upward bias.A retest of 50EMA is expected later with the price action bouncing of these levels.This indicates a further reversal and the pair trading at the bottom of ranging market. We can see the rebound on the pair stronger showing some signs of medium term bullish movement towards an upward bias. This will target projection at the 1.2663 level and will break here later testingatthe 1.2706 levels. Hence, we’d be expecting resumption of the larger up trend from current resistance-turned-support levels. However, the pairbreaking the support area at the 1.2637 level will dampen our bullish perspective on the pair and will test the1.2617 levels.


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