Global macro overview for 31/05/2016:
The Friday's remarks of FED Chairperson Jannet Yellen are still being digested by financial markets as dollar gains across the board and global indices are edging higher. Yellen's rhetoric regarding the interest rate hike is still positive if "probably in the coming months" the economy and labor market situation gets better. Moreover, Yellen noted, that factors that pushed inflation lower seem to be stabilizing, which is in line with some of the other comments of the FED policymakers. The question is, whether the FED believes the US economy is strong enough to withstand a rate increase at either its June or July meetings. We will soon find out.
Let's now take a look at the US Dollar index technical picture at the daily time frame. The recent rally from 91.92 low had broken above 21 and 50-period moving average and now it was capped just below the 100 days moving average. Moreover, the support at the level of 95.21 had been tested as well, which supports the view, that bulls are gaining more strength and are in control over this market. This possibility will be fully confirmed when bulls will breakout above the 96.41 technical resistance and this might happen anytime soon.
