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US Debt Ceiling Determines Fate

Since the start of this week’s trading, the price of the USD/JPY currency pair is on a rebound path to the upside. Gains reached the resistance level of 136.68, before settling around the level of 136.36 at the time of writing. This bullish rebound is waiting for strong catalysts to confirm its strength and continuation. This is amid cautious anticipation of the US dollar and global financial markets. US congressional leaders said they were optimistic a bipartisan agreement could be reached to raise the debt ceiling within days even as House Speaker Kevin McCarthy warned the two sides were still far apart after Tuesday’s meeting with US President Joe Biden.


Lawmakers from both parties said the two leaders agreed on a new system for personnel negotiations, and said they hoped to strike a bipartisan agreement to avoid an unprecedented American stumble during the hour-long Oval Office meeting. The White House also canceled Biden’s plans to visit Australia and Papua New Guinea after he traveled Wednesday to Japan, so that the president could return to Washington in hopes of striking a deal. Biden plans to call the leaders for an update while he’s away before meeting when he returns.

For his part, the Speaker of the US House of Representatives said that these talks will include Steve Ricchetti, Senior Adviser to the White House and Director of the Budget Shalanda Young, in addition to Republican Representative Garrett Graves and members of the House Speaker’s staff. Senate Majority Leader Chuck Schumer said “some additional players” could be involved as well, while McCarthy said he hoped negotiations could resume within hours. “We have a lot of work to do,” McCarthy told reporters. And “It is possible to get a deal by the end of the week. It is not difficult to come to an agreement.”

Schumer, for his part, said he was more optimistic than he was after meeting with the president and congressional leaders last week, while House Minority Leader Hakeem Jefferies praised the “open, honest and friendly discussion.” “The bottom line is we all came to an agreement that we will continue the discussions,” Schumer added.

The gathering at the White House came amid signs that negotiators are struggling to find common ground, with ingrained differences over the size and scope of concessions to raise the federal spending limit. Failure to reach a deal is likely to push the United States past its debt ceiling as soon as next month, triggering a tailspin that could rattle global financial markets, raise borrowing costs for government, businesses and consumers and jeopardize signs of weakness in an economic expansion that has already begun. appear.

Wall Street markets showed fresh concern on Tuesday about Washington’s ability to raise the debt limit and prevent a historic default, with both stocks and bonds falling. Yields edged up across the US curve, with the 30-year bond rate rising to around 3.9% – the highest rate since unrest affecting regional banks erupted in early March.

  • There is no change in my technical point of view, only the performance on the daily chart below.
  • The bulls have regained control over the performance of the price of the USD/JPY currency pair.
  • The bulls may succeed in moving the currency pair towards the psychological resistance level 140.00 if the currency pair settles above the resistance 138.20.

The support level 133.30 will be important for the bears to firmly control the trend. I still prefer to buy the currency pair from every downward level. The currency pair will be affected by the fate of the US debt ceiling and the statements of US Federal Reserve policy officials. In addition to the extent to which investors are willing to take risks or not.

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