Global macro overview for 27/06/2017:
The US Durable Goods Orders data were worse than market expectations as they declined 1.1% in May compared with the consensus forecast of a 0.5% decline for the month. Following a revised 0.9% decline in the previous month, there was an annual increase of 2.8%. Capital goods orders declined 3.1% on a monthly basis while non-defence capital goods orders, excluding aircraft, fell 0.2% on the month following a 0.2% gain in the previous month to give a 2.3% annual growth.
The FED looks at the series of the weaker data through its fingers and continues to underline the belief that it is a temporary weakness and the economy remains on the right track. Moreover, market participants should also look for clues as to whether the FED is still calmly approaching a series of weaker data. In any case, the market's future pace of tightening by the FED is still insufficient and needs to get real soon. By the end of 2018, the market is discounting fewer than two interest rate hikes, but when FED will start to unwind their balance sheet, it might not be enough. The market is kind of familiar with this outlook, but it does not fully take into account higher rates and expected lower liquidity. It seems therefore appropriate to expect monetary policy tightening to go on, but the US Dollar remains weak despite hawkish comments from FED Chairperson Jannet Yellen at the last FOMC meeting.
Let's now take a look at the US Dollar technical picture on the H4 time frame. The market is trading near the technical support at the level of 96.84 in oversold market conditions. Moreover, the price is back below the navy trend line support and below all of the moving averages.
