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Forex pairs in this Article » EUR/USD (Chicago) - EUR/USD extends short-term bearish channel on Washington hopes that shutdown may come to an end soon and debt ceiling will be extended.

Monday recap and what’s ahead

According to Jim Langlands from FXcharts “the holidays in the US have meant that volume has been light, with reduced volatility and with most currency pairs trading within a few points of the weeks opening levels. The US$ came under some mild pressure as the standoff in Washington continues, with the Euro earlier reaching 1.3597 before drifting lower once again as the session wore on, as hopes again increased that something will be stitched together. With the comparative lack of volatility, who would have thought that the US is within a couple of days of going into default? Negotiations in the Senate to solve the crisis have showed signs of progress today, and a White House meeting due at around the NY close has been delayed to allow more time to negotiate. A failure to break the stalemate before Thursday’s deadline to raise the debt ceiling will leave the US unable to pay its bills and will have huge ramifications, potentially pushing the US back into recession and bringing the world to the brink of financial meltdown.”

EUR/USD Technical Levels

Technically speaking, the pair is offered at 1.3552 and oscillates between supports aligned at 1.3461 (September 24th lows), 1.34 (August 28th highs) followed by 1.3220 (August 26th lows) and the resistances set at 1.3564 (September 28th highs), 1.3631 (October 4th highs) ahead of 1.3716 (January 30th highs). The pair extends the short-term bearish channel that started yesterday on talks in Washington that the debt ceiling will be extended until next year and both political parties will put an end to the shutdown. The trend index reports the pair as slightly bearish on one-hour timeframe below the EMA20.
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