EUR/usd
The Congress voted for the debt ceiling increase. Now the Treasury is allowed to take loans at least till February 7. Exactly by this time all disagreements regarding the deficits and government spending structure are expected to be eliminated. Besides, the Treasury is allowed to take measures to postpone the date, when it runs out of money. According to different estimates, it may be in March-April. But it doesn't mean that the political crisis is postponed till that date. The nearest deadline, set by lawmakers, is December 13 – by that time the lawmakers will have to approve a long-term deficit reduction plan. The reaction of Forex was really surprising. The US dollar against our expectations is gradually falling. Yesterday at the beginning of the US session it was growing well (eurusd went down to 1.3470), when it became clear that the lawmakers would manage to come to an agreement. However, at the lower bound of the channel the euro got support and already now trading is held at the highs of Wednesday, which is near 1.3560. Note that for almost a month the pair has held within the narrow channel. If earlier we saw the reason in the uncertainty about the USA, now this factor is no longer relevant. Fundamentally, the dollar is likely to get support in the near future as the Treasury will be releasing bonds to meet its obligations. It will be exempting dollar liquidity from the markets. However at the moment there's nothing of the kind (while things are running in their usual way). Besides, we can't overlook the fact that the US currency has lost some of its investment attractiveness because of all these constant tensions regarding the budget. So, it is quite possible that we will see gradual appreciation of the US currency instead of its vigorous growth. Maybe, the level of 1.3600/30 will be tested again. And already from these levels we expect probable decline of the pair to 1.30 by the end of the year.
GBP/USD
The gbpusd chart looks interesting. In the recent days the amplitude of fluctuations has been growing. On Monday the difference between the daily high and low made 80 pips. On Tuesday it already was 95 and yesterday – 165 pips. The growth was supported by the British employment statistics, where the number of unemployment claims decreased by over 40K. And the decline occurred under the pressure of USD buyers, who staked on the agreement among the US congressmen.
USD/JPY
The same with the yen. Yesterday it was getting weaker and weaker on the expectations, which provoked growth of the pair up to its three-week highs, but already now the pair is trading at 98.35. Advocates of technical analysis have probably noticed divergence between RSI and the currency pair rate on the 4hr charts, which allows speaking about further decline. Anyway, we don't change our basic forecast, that is further growth of the pair on shifting of capitals into the dollars in the recent days and weeks.
The S&P 500 Index futures was growing eagerly yesterday in the second half of the EU session, but at the end of the US one it stalled and is now gradually retracing. It is quite possible that profit-taking will bring the index back at least to the lower bound of the channel, i.e. to 1670 by the end of the month.
