With the epic $1.9 trillion American Rescue Plan now in the books, the Biden administration is turning its attention to taxes. At the direction of the U.S. Treasury Department, the IRS has delayed the April tax deadline for one month (May 17). While this isn’t a huge deal, talk of pending tax hikes is. 

Throughout Election 2020, Democrat Joe Biden built a platform on pledges to tax the rich. Now, it looks like these talking points are set to become reality. Details are beginning to leak out on coming tax reforms, with most believing that the largest single tax hike in more than three decades is on the way. Basically, taxes are due to go up on entities that make more than $400,000 per year. Right now, the details on how this is to be done are foggy; here are few ideas being floated:

• Removing “step-up-in-basis” from estate valuations, thus taxing long-term assets at current market prices
• Raise capital gains taxes on top earners
• Institute a mandatory, minimum corporate tax
• Roll back many Trump-era tax cuts

At this point, there is nothing concrete about Biden’s forthcoming tax policies. But, the Democrats control Congress and don’t need bipartisan support to do anything. So, taxes are going up in 2022 ― the only question is by how much.

EUR/USD Rallies As Biden Tax Talk Intensifies

It’s been a strong session for the EUR/USD. Rates are back above the Daily SMA (1.1928) and looking for more.

For this week, there will be one key level on my radar:

• Resistance(1): 38% Macro Retracement, 1.1990

Bottom Line: As long as the Spike Low (1.1835) holds as an intermediate-term bottom, I’ll have sell orders in the queue from 1.1984. With an initial stop loss at 1.2029, this trade produces 45 pips on a standard 1:1 risk vs reward ratio.

As we wrap up the forex session, the USD is struggling versus the majors. Today’s key movers have been the EUR/USD (+0.35%), USD/CHF (-0.56%), and the AUD/USD (+0.17%). Be on the lookout for more tax headlines out of the Biden White House by late this week.