Financial markets are waiting for more details on Washington's tentative agreement to suspend the $31.4 trillion federal debt ceiling until January 2025 in exchange for spending limits and cuts to governmental programs. Not everything about this deal is smooth sailing. Several far-right Republican lawmakers said they would oppose the agreement.
That means the bipartisan 99-page bill, which is still subject to approval in both houses of Congress, may face difficulties before the U.S. runs out of money next week.
According to Brian Martin, head of global economics at ANZ, the national debt limit issue is not resolved until Congress approves the deal. If it gets approved, the Federal Reserve (Fed) will have to keep raising rates.
According to the CME FedWatch tool, markets are estimating a 60 percent chance of a 25 basis point rate hike in June, up from a 26 percent chance a week earlier.
The regulator's decision at the upcoming Fed meeting will have an impact on the U.S. currency. If interest rates do rise, the dollar will continue to strengthen.
Besides the vote on the debt ceiling, this week market participants will also focus their attention on the U.S. employment data, which is scheduled to be published on Friday.
Today's publication of Swiss GDP may have a short-term impact on the USD/CHF currency pair pricing. Gross product is expected to grow by 0.1% over the quarter, while the annual figure should decrease by 0.2% and amount to 0.6%.
The price of the USD/CHF currency pair is in an uptrend on the H4 timeframe.
On the H1 timeframe one can see a new ascending wave chain forming. Breaking through the latest top at 0.9075 will strengthen the price movement in the direction of buying. A strong resistance is the level of 0.9120.
Signal:
USD/CHF short-term outlook is to buy.
The target is at the level of 0,9155.
Take profit could be placed near the level of 0,9120.
A stop-loss could be placed at the level of 0,9020.
The bullish trend is short-term, so trading volume should be no more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
