Global macro overview for 17/08/2016:
The main fundamental event of the week, the FOMC Meeting Minutes, is scheduled for the release at 06:00pm GMT today. Just yesterday, New York Fed President William Dudley reminded the markets that a September rate is possible, adding that the US elections will not affect the Fed decision. Moreover, as we remember from last NFP data, the USD has benefited from strong US employment fundamentals, but those have been offset by way worse than expected consumer spending data last Friday.This is why the CME Group FedWatch tool is currently pricing a 85% chance that the interest rate will stay at the same level and only 15% of a hike probability. In conclusion, the investors' disbelief of a September hike is mainly due to the US presidential election cycle (denied by Dudley) and disappointing data on the US economy.
Let's now take a look at the US Dollar Index technical picture in the daily time frame before the important news release. The market is trading below the 55, 100 and 200 daily moving average, but no new low has been made since the rejection from the 61% Fibo level. Nevertheless, the key to the upside is still the upper golden trend line and only a clear violation above this level would pave the way towards higher prices. The next support is seen at the level of 94.42 and the next resistance is seen at the level of 96.72.
