The euro-dollar pair reacted quite calmly to the news that senators had agreed to end the longest shutdown in U.S. history. At the market open, the price dropped only 20 pips – sellers could not develop a downward movement. The short-term southern momentum faded, and the initiative in the pair shifted to EUR/USD buyers, who, however, have not yet achieved any success. The pair is attempting to overcome the resistance level at 1.1590 (the Tenkan-sen line on the D1 time frame)—but lethargically, "without fire."

In my opinion, there are several reasons for this caution. First, the shutdown is not yet officially over. Senators have taken a serious first step toward ending it by reaching a bipartisan agreement, but that is not enough. Second, we are talking about a temporary budget (until January 31). And third, the mere fact that the shutdown is ending means that soon the BLS will publish official labor market data for September and possibly October. That is, the resumption of government work is a fundamentally positive factor for the greenback, but all subsequent events are unlikely to favor the American currency.

So, what happened over the weekend? Just last Friday, a representative of the Republican Party stated that the Democrats' compromise proposal was rejected. But then it turned out that eight Democrats agreed to support the compromise proposed by the Republicans.

Let me remind you that the main sticking point is the funding of healthcare programs. Democrats demanded (and continue to demand) the indefinite extension of subsidies under Obamacare and the repeal of recent Medicaid cuts. Republicans insisted on a "clean" version of the law, without "riders" — that is, additional politically motivated amendments.

All along, the Republicans were counting on "turncoat Democrats" who would support the extension of government funding for various reasons. Ultimately, their calculation proved correct, although they still had to make concessions. Essentially, the eight Democrats exchanged a temporary budget extension for the promise by the Republican leader to temporarily extend the subsidies for health insurance. If the promise is broken, a new shutdown will occur on February 1.

However, I reiterate – it is too early to speak of the end of the current shutdown. Senators have only conducted a test ("signal") vote: the main vote, which is to take place in the coming days, is still ahead. After that, the bill will be sent back to the House of Representatives for a re-vote, as the original version of the document has been amended. The lower chamber of Congress requires only a simple majority, but some Republicans have previously stated that they will not support a "compromise" budget that includes concessions to the Democrats. Whether they have changed their position is unknown. It is also unclear when a full budget for the next year will be adopted.

But let's assume that the current shutdown will soon end. Will the greenback appreciate in this case? It is quite possible that, in the moment, the dollar will positively react to this fact. However, subsequent events are sure to be unfavorable for the American currency.

As of today, the likelihood of the Fed cutting interest rates at the December meeting is 65%, according to the CME FedWatch tool data. If the September/October Non-Farm Payrolls disappoint, reflecting further cooling in the U.S. labor market, the chances of a December cut will rise to 90-99%. The likelihood of an additional cut at the January meeting (currently at only 25%) will also increase. The dollar will again be under significant pressure, and EUR/USD buyers will be able not only to overcome the intermediate resistance level at 1.1590 (the average line of Bollinger Bands on D1) but also the main price barrier at 1.1650 (the lower boundary of the Kumo cloud on the same time frame), with a breakthrough opening the way for buyers to the boundaries of the 17th figure.

Such a scenario appears quite likely, given the weak ADP data (+40,000 employed in the private sector) and extremely unfavorable data from Challenger, Gray & Christmas Inc., which reflected a reduction of 153,000 jobs. Of course, these releases cannot be compared directly with each other and certainly not with Non-Farm Payrolls (different counting methods, different data sources, etc.) – however, ignoring alarming signals that are likely to be confirmed is also not an option.

This explains the cautious position of market participants: EUR/USD traders are not risking opening large positions, neither to the north (in anticipation of the shutdown finalization) nor to the south (in anticipation of NFP).

The technical picture also indicates ongoing uncertainty. The bears in the pair could not overcome the intermediate support level at 1.1540 (the lower boundary of the Kumo cloud on H4), while buyers could not break through the intermediate resistance level at 1.1590 (the average line of the Bollinger Bands on D1). The prevailing fundamental picture for the EUR/USD pair suggests further price growth, but it is advisable to open long positions only once buyers establish a foothold above the 1.1590 mark. The next targets for the northern movement are 1.1650 (the lower boundary of the Kumo cloud on D1) and 1.1700 (the upper line of Bollinger Bands on the same time frame).