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EUR/USD made a clear break above the resistance line of 1.1860, reaching a high of 1.19, just below the next resistance level of 1.1910 and then consolidating. GBP/USD recovered despite Brexit worries about a short transition and trades around 1.34. USD/JPY is up to 113.30, still shy of the cap at 113.50 but up some 40 pips on the day.

In the background, we have good news from the housing sector: sales of existing homes advanced and reached an annualized level of 5.81 million in November, better than 5.53 expected.

The greenback should have received a boost from the successful vote in the Senate: the tax bill is nearing Trump’s desk for final signing. The House will re-vote on it soon in what as seen as a formality.

So why is the dollar falling? One reason is a “buy the rumour, sell the fact” effect. The news was out already last week. Another is speculation that President Donald Trump could sign the bill only in January. He said it would be done before Christmas. As this is only a ceremonial formality and Trump supports the bill, it shouldn’t be of worry to markets.

So, the sell-off of the dollar seems like an exaggerated reaction to the short delay mixed with a “sell the fact” reaction.

Is this is a buying opportunity on the greenback? This depends on the currency. EUR/USD has more reasons to rise than GBP/USD, while USD/JPY is stuck in a range.

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