EUR/USD refreshes 5-day highs above 1.18 as DXY edges lower to 93

• DXY struggles to stay in the positive territory as tax vote kicks off.
• EUR/USD up more than 60 pips on the day.
• Greenback fails to take advantage of rising T-bond yields.

After breaking above the 1.18 mark during the European session, the EUR/USD stayed in a tight range amid a lack of fresh fundamental drivers, but gathered strength in the last hour and renewed its 5-day top at 1.1850. As of writing, the pair was trading at 1.1843, adding 0.5% on the day.

The pair's recent upsurge seems to be a product of a broad-based selling pressure witnessed on the greenback. Although the 10-year T-bond yield gained more than 3% to refresh its highest level in nearly two months on Tuesday, the US Dollar Index couldn't stage a decisive rise above the 93 mark. The thin holiday trading could be causing this unusual inverse correlation between the greenback and the T-bond yields.

Meanwhile, investors are awaiting the outcome of the tax bill vote. US Senate Republican Leader McConnell recently told reporters that the Senate was expected to finish on tax bill ‘sometime tonight,' as reported by Reuters. 

Tomorrow's macroeconomic calendar won't be featuring any data that could impact the trading action and investors are likely to witness further unorthodox movements ahead of the Christmas break.

Technical outlook

Valeria Bednarik, American Chief analyst at FXStreet, writes,"the EUR/USD pair surged to its highest for the week, trading at the upper end of the past 2-week's range,  limited by 1.1715 and the 1.1870 region, with a clear upward potential according to technical readings in the 4 hours chart, as the price has managed to advance above all of its moving averages that anyway continue lacking directional strength, while technical indicators gained momentum upward above their mid-lines."

According to the analyst, supports could be seen at 1.1800, 1.1750  and 1.1715 while resistances align at 1.1870, 1.1900 and 1.1940.

• EUR/USD - Close below 1.1712 would negate upside pressure - Commerzbank

Today's data from the U.S.

• US: Building permits in Nov were at a seasonally adjusted annual rate of 1,298,000
• US: Current-account deficit decreased to $100.6 billion in Q3