Global macro overview for 31/10/2016:
The US Personal Income and Personal Spending data are scheduled for release at 12:30pm GMT today and it might be interesting to see whether they will support the recent US GDP increase of 2.9%. Market participants are looking for upbeat data as the consensus forecast sees personal income strengthening to a 0.4% monthly in September against 0.2% previously. A similar increase in reading is expecting from consumer spending: jump to 0.5% after no change in August. In conclusion, the US economic expansion remains somehow resilient to the global headwinds, with the GDP (and possibly the personal income and spending) figures beating the market expectations for the last quarter. This might be the main reason (besides employment and inflation expectations) why the FED is looking to fulfill the promise of raising the interest rates twice this year as soon as in December 2016. According to CME FedWatch Tool, the implied probability of an interest rate hike on December 14th 2016 by 25bps is now 68%.
Let's now take a look at the US Dollar index technical picture at the daily time frame. The series of higher lows and higher highs from the swing low at the level of 91.92 cleary indicates a bullish market in the near-term. The price is trading above all of the moving averages and the bulls are in full control over this market as long as the level of 97.57 is not clearly violated. The next support is seen at the level of 97.57 and the next resistnace is seen at the level of 99.12 and 99.84.
