Global macro overview for 15/12/2017

The decisions of the four leading central banks and key data from the US economy were all released yesterday, but in the FX market, we can not see any interesting developments. Norges Bank provided the most emotions, which brought the expectations of the interest rate hike closer, but the Norwegian Krone rally was taken to a greater extent from disastrous liquidity conditions than from the scale of surprise by the decision. The SNB and BoE did what they were supposed to do, that is not much, so it is difficult to require a stronger response from CHF and GBP. But the ECB meeting is never to be ignored. Yesterday investors have forgotten what they should be are looking at. Before the meeting, expectations were raised to strengthen the hawk's sector in the ECB Governing Council after a series of excellent data on economic activity in the Eurozone. We received higher GDP forecasts, but the inflation path projection was disappointing, as only in the case of 2018 we had a revision upwards of 0.2 percentage points and only on the basis of higher fuel prices. In the long horizon, the bank sees inflation at 1.7%, which is quite far from the 2.0% inflation target. Thus, Mario Draghi showed that the monetary expansion remains and repeated, that interest rates will not be moved long after the end of QE. Nevertheless, the Euro reaction across the board was less than interesting and this trading conditions might continue until the end of the next week.

Let's now take a look at the EUR/CHF technical picture at the daily time frame. We can clearly see the growing bearish divergence between the price and the momentum oscillator. Moreover, the price is moving inside of an Ending Diagonal pattern, whcih could soon terminate. In that case, the market should reverse and try to test the nearest support at the level of 1.1538.

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