Global macro overview for 18/01/2017:
The US Consumer Price Index data are scheduled for release today at 01:30 pm GMT. Market participants expect a 0.3% increase in inflation on a monthly basis, after a 0.2% increase a month ago (2.1% expected on yearly basis). If the yearly expectations are met, then the inflation in the US will pop up to a two-year high in December. Moreover, if the overall estimate is right, the case will strengthen for expecting the Federal Reserve to continue raising interest rates this year. A rate hike at next month's policy meeting is still considered unlikely, but today's CPI report will likely to back the view that the Fed's still on track to raise rates in 2017.
Let's now take a look at the US Dollar Index technical picture in the 4H time frame. Yesterday's impressive Pound rally made the Dollar weaken and the market closed the daily candle below the important technical support at the level of 100.53. Nevertheless, the bullish trend is still intact, because the trend reversal would require the level of 99.41 to be broken as well. Any breakout above the level of 101.73 will be considered as the first clue of a trend resumption.
