Yesterday, the US dollar started losing value quite unexpectedly. The decline could be explained by a too emotional reaction of traders. The fact is that at the weekend, Joe Biden said that the debt ceiling voting would take place on May 30. However, there were some peculiarities.
Yesterday, the US House committee voted to advance the debt ceiling bill. Today, the House of Representatives will vote on the issue. In case of success, the voting will take place in the Senate on June 2. Notably, Janet Yellen has warned that the US government will have money to pay all of its bills only until June 5.
What is more, some representatives of the Republican Party have already said that they will vote against the bill. In other words, the expectations failed to meet reality and the situation remained uncertain. In addition, mass media may continue discussing the aftermath of a possible default in the United States.
Against the backdrop, the US dollar will hardly rise. Notably, the currency has no room to grow as it is extremely overbought.
Meanwhile, the euro and the pound sterling are also falling after a confident rise. However, the current drop could be defined as a technical one. That is why both currencies may surge amid the US job openings report that may unveil a decline.
Photo – the US dollar
Such forecasts are quite gloomy especially ahead of the US Labor Department report that is due on Friday. Any sign of the deterioration of the labor market situation leads to a slump in the national currency.

On the trading chart, we see that the euro/dollar pair stopped rising and resumed losing value. As a result, the price once again slid below 1.0700. The market sentiment remains bearish. That is why the price settlement below 1.0700 may lead to the prolongation of the downward correction. Traders should keep in mind that the euro is oversold, which is confirmed by many technical tools. However, speculators are ignoring these signals, which points to the inertial movement.
Such a decline may spur a rapid drop in the volume of short positions and a sharp price reversal.

Meanwhile, the pound/dollar pair left the stagnation phase near the level of 1.2350 and started gaining in value. This is the first technical signal of a possible end of a two-day correctional cycle from the high of the mid-term trend.
To continue rising, the pound sterling should consolidate above 1.2450. In the event of this, we may see recovery after the recent correction. However, the downward correction may continue if the price settles below 1.2300 at least on the four-hour chart.


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00:00 INTRO
00:25 Debt ceiling voting
00:51 USA
01:16 QUOTES
01:45 The US dollar
02:02 EUR/USD
02:50 GBP/USD