Global macro overview for 29/08/2016:
The highly anticipated speech made by FED Chairperson Jannet Yellen at Jackson Hole economic conference last Friday might be clearly considered dovish. Yellen said clearly that the case of a Fed rate hike had strengthened, but she still remains very much data dependent. She did not say anything about a timing of the anticipated interest rate hike anyway. Nevertheless, shortly after that speech, more attention of market participants was focused on another FED member Stanley Fischer. His statements were much more hawkish when he answered the questions regarding a possible September 2016 rate hike and even more hikes this year. In conclusion, FED is still committed to tightening monetary policy, but global investors are now pricing in a 36% probability of a September rate hike by 0.25%.
Let's now take a look at the US Dollar index technical picture after the Jackson Hole conference. The index moved higher towards the 55-daily moving average and even passed the 38% Fibo retrenchment. Moreover, the bull camp has managed to break out above the short-term dashed blue trend line. Now it looks like it might be heading to the next resistance at the level of 50% Fibo ( 95.82) and 61% Fibo (96.24).
