The US government is running out of time to settle the crucial issue of raising the national debt limit. As US Treasury Secretary Janet Yellen previously stated, if the limit is not increased again or canceled at all, the US government will not be able to pay its bills.

She reiterated Sunday that June 1 remains a "hard deadline" for raising the national debt limit. "If Congress can't raise the $31.4 trillion debt ceiling before the Treasury runs out of money and has to acknowledge a default, there will be hard choices to make about payouts to Americans," Yellen said in media comments.

In view of the ongoing uncertainty regarding the issue of US government debt, the US dollar still receives support as investors are not in a hurry to buy US Treasuries. Their yield has declined slightly but still remains close to last week's 9-week high of 3.72%.

The US debt limit of $31.4 trillion was reached back in January, and the country's government is currently paying bills and debt obligations by cutting some budget allocations, primarily by cutting social spending.

As we noted in our recent article "US Dollar: short selling puts deposits at stake", US President Joe Biden said last week that if the US fails to pay its bills, it will be a disaster. As long as investors get rid of government bonds, the market situation will unfold in favor of the US dollar.

At the time of this article's publication, the US dollar index (DXY) was near 103.4, having slightly strengthened during the Asian trading session. Last week, it reached 103.49, corresponding to the levels of the end of March this year.

The greenback also finds support from expectations of further tightening of the Fed's monetary policy. On Wednesday (at 18:00 GMT), the minutes from the Fed's latest policy meeting will be published. At the meeting in May, the Fed policymakers decided to raise the interest rate by 0.25%, to the current level of 5.25%. The hawkish rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar to further growth. And, conversely, the soft rhetoric of their statements in the minutes will dent the US dollar's strength. Fed Chairman Jerome Powell confirmed last Friday that the efforts of the US central bank are determined to bring inflation to the target level, despite the recent banking crisis. It may not be necessary to raise interest rates as much and quickly because of this, but it is still necessary. Indeed, inflation in the US is still well above the Fed's target of 2%, and the labor market remains "tight".

There are no important publications in the economic calendar for the second half of the trading day. Nevertheless, market participants will pay attention to the speeches of several Fed representatives at 12:30, 14:50, and 15:00 (GMT).

From the technical viewpoint, the US dollar index DXY (designated as CFD #USDX on the MT4 platform is eager to retain the uptrend which has been going on since early May. The price is trying to climb above the key resistance levels at 103.55 (50EMA on the weekly chart) and 103.70 (200EMA on the daily chart). If successful, it will open up the opportunity to reinforce the long-term bullish trend.

The instrument will resume its decline if it breaks support at around 102.62 (200EMA on the 1-hour chart), 102.45 (50EMA on the daily chart), and 102.24 (200EMA on the 4-hour chart).

Support levels: 103.00, 102.62, 102.45, 102.24, 102.00, 101.50, 101.00, 100.80, 100.50, 100.00, 99.25, 99.00

Resistance levels: 103.55, 103.70, 104.00, 105.00, 105.85