Global macro overview for 06/03/2017:
Last week began with markets pricing in about a 50% chance of a hike in the federal funds rate at the Federal Open Market Committee meeting this month but ended with markets almost fully pricing in a quarter-percent hike. The set of comments from FED policymakers on Friday, including FED Chairperson Janet Yellen, indicated that a rate hike was near, perhaps at next week's monetary policy meeting. Bill Dudley, New York Federal Reserve President said last Friday: "I think the case for monetary policy tightening has become a lot more compelling", and the other Fed officials remarks were as hawkish as his. Even Yellen again reiterated her hawkish statement, saying: "We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect", and: "Indeed, at our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate". In conclusion, the hawkish statements are very popular among the Fed policymakers, so the question remains: will the Fed deliver on March 15th and how much of the rate hike expectations are already priced-in?
Let's now take a look at a Gold technical picture at the H4 time frame. The price violated the technical support at the level of 1,225, but no follow through occurred so far. The price is now trading just below the technical resistance at the level of 1,236 and due to the oversold market conditions might try to break out above this level and test the golden trend line again from the below.
