The situation with U.S. government debt remains unstable but quite intriguing.
Ongoing negotiations to repeal the U.S. debt ceiling are becoming more and more protracted. ANZ Bank economists discuss the possible decision of U.S. lawmakers.
They suppose that an agreement on suspending the national debt ceiling for a few months is expected. This will give the debaters more time to negotiate and achieve results that could satisfy all stakeholders.
According to ANZ experts, negotiations may be even more tense during this period. This, in turn, could create market instability and likely difficulties for economic growth.
The U.S. President and Republican Speaker Kevin McCarthy are scheduled to meet tonight for talks.
If a compromise agreement is reached that includes budgetary savings, markets might see it as a signal of fiscal restraint and support for American currency, which in turn could depreciate the EURUSD.
Europe's GDP will be released today at 09:00 AM UTC. Gross Domestic Product is projected to remain at 1.3% year-on-year. A deviation from the forecast will increase market volatility in the short term.
Besides, the U.S. retail sales statistics are expected to be at 12:30 AM UTC. The news on the U.S. retail sales volume may influence the EURUSD pricing. If retail sales exceed expectations of 0.8%, this could indicate strong economic activity and growing domestic demand in the U.S., and it would support the American currency.
The EURUSD left the correctional corridor on the H4 timeframe. Support at 1.0845 stopped the downward momentum and created a pullback in price.
The price is forming a downtrend on the hourly timeframe. The expectation of today's news makes the pair move towards resistance. The downtrend might continue if the downtrend line is reached.
Signal:
Short-term prospects for EURUSD are selling near 1.0905.
Target is at the level of 1.0800.
Part of the profit should be fixed around the level of 1.0845.
Stop-loss is around the level of 1.0955.
The bearish trend is short-term, so choose a trading volume of no more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
