US: Trump Escalates Calls For Congress To Raise Debt Limit
US President-elect Donald Trump has escalated calls for Congress to raise the federal debt limit ahead of his inauguration on January 20, describing a 2023 deal between President Joe Biden and former House Speaker Kevin McCarthy (R) as, "one of the dumbest political decisions made in years." Under the terms of the Biden-McCarthy deal, the debt ceiling was suspended until Jan 1, 2025, in exchange for a mechanism to limit some government spending, known as the Fiscal Responsibility Act.
- Trump said of the 2023 deal, in a Truth Social statement: "There was no reason to do it... The Democrats must be forced to take a vote on this treacherous issue NOW, during the Biden Administration, and not in June. They should be blamed for this potential disaster, not the Republicans!"
- Treasury Secretary Janet Yellen said in a letter to Congressional leaders on Friday that, due to a USD$54 billion decrease in outstanding debt, the Treasury "currently expects to reach the new limit between January 14 and January 23, at which time it will be necessary for Treasury to start taking extraordinary measures." Those measures are likely to postpone hitting the debt limit until late Spring.
- Although suspending the debt limit has long been a Democrat priority, Democrats are unlikely to agree to a bipartisan measure without significant policy concessions. The most likely option for Congressional Republicans is to attach a debt limit hike to a partisan reconciliation package on energy and border security, adding another complication to Trump's legislative agenda.
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AUSSIE 3-YEAR TECHS: (Z4) Bounce Mode
- RES 3: 96.380 - High Mar 21 2023
- RES 2: 97.190 - High May 5 2023
- RES 1: 96.730/932 - High Sep 17 / 76.4% of Mar-Nov ‘23 bear leg
- PRICE: 96.090 @ 15:41 GMT Nov 29
- SUP 1: 95.760 - Low Nov 13
- SUP 2: 95.750 - Low 27 Nov ‘23
- SUP 3: 95.480 - Low Jan 11 2023 and a major support
Having hit a fresh pullback low at 95.760 across the global rates sell-off in recent weeks, the market found bottom and has staged a shallow bounce above the 96.00 handle. Nonetheless, recent weakness confirms the downside bias, with support undercutting at 95.750 below ahead of major support of 95.480. For any corrective recovery to take hold, markets need to retake the 96.00 handle on a closing basis.
USDCAD TECHS: Pullback Appears Corrective
- RES 4: 1.4287 2.0% 10-dma envelope
- RES 3: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4196 1.764 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4078/4178 High Nov 27 / 26 and the bull trigger
- PRICE: 1.4005 @ 16:09 GMT Nov 29
- SUP 1: 1.3965/28 20-day EMA / Low Nov 25 and a key support
- SUP 2: 1.3858 50-day EMA
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
Trend conditions in USDCAD remain bullish and Tuesday’s fresh cycle reinforced this theme. The move higher confirmed a resumption of the primary uptrend and marked an extension of the bullish price sequence of higher highs and higher lows. Sights are on 1.4196 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. For now, the latest pullback appears corrective.
AUDUSD TECHS: Corrective Bounce
- RES 4: 0.6762 High Oct 9
- RES 3: 0.6733 High Oct 13
- RES 2: 0.6604/88 50-day EMA / High Nov 7 and a reversal trigger
- RES 1: 0.6534/50 20-day EMA / High Nov 25
- PRICE: 0.6512 @ 16:03 GMT Nov 29
- SUP 1: 0.6434 Low Nov 26
- SUP 3: 0.6400 Round number support
- SUP 3: 0.6350 Low Aug 5 and a key support
- SUP 4: 0.6339 Low Nov 10 2023
A bearish theme in AUDUSD remains intact. The fresh cycle low on Tuesday marks an extension of the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend. Scope is seen for a move towards 0.6350, the Aug 5 low and the next key support. The pair has recovered from its recent lows - a correction. Initial firm resistance to watch is 0.6534, the 20-day EMA.
