Global macro overview for 27/02/2018

The currency market shows no major signs of life, and investors focus on the Fed Chair's J. Powell afternoon speech. The text of Jerome Powell's speech will be published at 03:30 pm GMT and the meeting in front of the Financial Services Commission will start at 05:00 pm GMT. The main attention, however, will be the question session, which will start after the presentation of the statement. The market will look for signals whether the Fed is closer to three or four hikes this year and whether it intends to be more aggressive in the next period. So far, Powell has presented neutral views, so turning to one of the camps (hawks/doves) will be an important signal. Nevertheless, in the context of the next meeting in March, he does not have to do much when the market does not fully discount the increase. In addition, it is up to Powell to build consensual forward guidance with the recognition of the dovish camp's arguments, which reduces the chances of a clearly hawkish tone. On the other hand, even moderate Powell openness to more interest rate hikes (if the data from the economy remains very good) will be a sign of a clear change at the Fed rhetoric compared to the dovish Yellen. The market, however, quietly counts on it and positions itself on the hawkish tone of the performance.

Let's now take a look at the EUR/USD technical picture at the H4 time frame before the Powell statement. The market is consolidation inside of a very narrow zone between the levels of 1.2366 and 1.2257. Moreover, there is a golden trend line support located just below the technical support at the level of 1.2257, so any violation of this line will put the bears back in control over the market. In a case of a sell-off, the next technical support is seen at the level of 1.2203.


The material has been provided by InstaForex Company -