Global macro overview for 18/02/2016:
The minutes from the U.S. Federal Open Market Committee for the month of January showed that policy members are concerned about market events and their impact on the American economy. Some members pointed out that the Fed decision to hike rates in December 2015 had triggered a sell off in equities. Moreover, the recent disappointing US labor data (mainly NFP and API) have put even hawkish members on hold as the US economy is still struggling to regain an active pace of growth. In conclusion, the Fed Chair Janet Yellen repeated the mantra of data dependency that will guide the pace of interest rate hikes.So far she has managed to revive the central bank chances of hiking rates in 2016 after her two testimonies, but in the recent minutes there seems to be far less confidence that the data will justify interest rate hike in the next meetings.
Let's take a look at the US Dollar index technical picture after the FOMC minutes release. The index was capped just below the important technical resistance at 97.18, and only a sustained breakout above this level would put the bulls back into control. In the longer term, the trend is still upward, but there might be first indications of a stronger correction within the trend.
