One Successful Step Toward Ending the Shutdown

[Ben Graham]

Over the weekend, the U.S. Senate took an important step toward reopening the government after a group of moderate Democrats broke with their party leaders and voted to support a deal intended to end the record-long government shutdown. On Sunday evening, the Senate voted 60–40 on a procedural measure to advance the bill. The Senate then adjourned until Monday and has not yet scheduled a vote on the bill's final passage.

The evident division within the Democratic Party reflects growing concern among centrists about the economic damage caused by the prolonged government paralysis. The shutdown has forced many federal agencies to suspend operations, delayed paychecks for government employees, and jeopardized the functioning of critical services, resulting in billions of dollars in losses to the economy. The moderates' vote signaled their willingness to compromise in order to end the crisis.

Despite this progress, the path to fully reopening the government remains uncertain. The Senate's proposed agreement must still be approved by the House of Representatives, where the Republican majority may oppose some of its provisions. The President could also veto the bill if he deems it unacceptable. Nevertheless, the Senate vote provides a glimmer of hope. It shows that even amid deep political polarization, compromise and cooperation are still possible. Now, it remains to be seen whether the leaders of both parties can find common ground and reach a decision that serves the nation's interests.

It is still unclear how quickly the shutdown can be resolved. To expedite the process, the Senate would need unanimous consent from all its members. Any senator could trigger several days of procedural delays.

As noted above, passage in the House of Representatives is not guaranteed. Democratic leaders have opposed any deal that does not extend the expiring Obamacare subsidies — something this bill does not include. Meanwhile, conservative Republicans are advocating for a bill that would fund the entire government through September 30 of next year. "We will fight against the Republican Party's bill in the House of Representatives," Democratic House Leader Hakeem Jeffries said in a statement on Sunday evening.

The looming resolution of the 40-day shutdown recalls previous standoffs, where the party attempting to use a government shutdown as leverage for political gain ultimately failed. Trump was unable to secure funding for the border wall during the 2018–2019 shutdown, and Republicans failed to repeal Obamacare during the 2013 shutdown.

As for the current technical picture for EUR/USD, buyers now need to focus on capturing the 1.1570 level. Only this will allow them to aim for a test of 1.1590. From there, they could potentially climb toward 1.1610, though doing so without support from major players may prove difficult. The most distant target is the 1.1636 high. In the event of a decline, I expect significant buying activity only around 1.1545. If there are no major buyers there, it would be wise to wait for a renewal of the 1.1520 low or consider opening long positions from 1.1490.

As for the current technical picture for GBP/USD, pound buyers need to seize the nearest resistance at 1.3150. Only this would allow them to target 1.3180, above which a breakout would be rather difficult. The most distant target is the 1.3215 level. In case of a decline, bears will attempt to regain control at 1.3135. If they succeed, a break below that range would deal a serious blow to the bulls' positions and push GBP/USD down to the 1.3095 low, with a potential move toward 1.3056.

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