Global macro overview for 28/11/2016:
The latest meeting minutes from the November Federal Open Market Committee (FOMC) boosted the USD during trading week. The main reason behind the US Dollar's advance was quite clear hints about the December rate hike. Just as announced at the beginning of 2016, the FED members have done their job to prepare markets for the high probability of an interest rate hike at the end of the year. Originally, in the beginning of 2016 FED Chair Janet Yellen mentioned about a possible 3-4 rate hike, but so far only one rate hike has happened. In order not to lose its credibility, the FED will be welcomed by market participants to hike the interest rate once again. Moreover, the interest rate hike might be justified by Trump's shock election victory as one of his election pledges is the commitment to spending on the infrastructure with the goal of creating jobs. This might increase the inflation expectations as they had been weak in the last couple of years in the U.S. ( and in some cases they held back the American central bank). The newest data set from the U.S. job market is scheduled for release this Friday at 01:30pm GMT (NFP-Payrolls data release), so the market participants will get a better picture of US economy and the consequences of almost certain interest rate hike.
Let's now take a look at the U.S. Dollar technical picture at the daily time frame. The swing high at the level of 100.52 had been clearly violated and after establishing a local top at the level of 102.06 the market is now in a corrective cycle that will test the recent top from the downside. The price is trading above all the moving averages and so far there are no signs of any trend reversal. The next technical resistance can be seen at monthly chart and it is at the level of 103.54.
