Global macro overview for 16/04/2018

The Syrian affair had an unpleasant development over the weekend, but the market reaction is surprisingly almost invisible. A drop of USD/JPY by 30 pips, or fluctuations in the price of Gold within 0.5% are not worth describing. Suggestions that military action will not turn into a longer campaign (President Trump said that "the mission was done") help calm the reaction. Nevertheless, the continuation of the conflict is not excluded: Trump warned that he would respond to the next attack with the use of chemical weapons; President Putin warns against the "chaos" that may arise from subsequent attacks on Syria; The US is ready to impose sanctions on other Russian companies that may be suspected of ties to the Syrian regime. In the intervals between macro data publications, information services (and social networks) remain to be monitored in the event of unexpected messages.

It is possible that Monday will be used by investors to confirm whether you can really ignore weekend events, or whether there is a reason to reduce risky positions. The technical picture on pairs with AUD, NZD and JPY indicates ugly corrections and unsuccessful breaking out of significant technical levels. At least it may cool the enthusiasm for continuing the trends from last week. However, if the next day remains calm, the return of risk-on is the path along the line of the least resistance.

The main point of the calendar on Monday is retail sales from the USA. Expectations are on the positive side (0.4% m/m) after a series of three readings at -0.1%. Despite this, global investors must not forget that the USD has a problem to clearly gain after good publications, but the disappointments are carefully reflected by the market.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. There is no dramatic improvement in the US Dollar price so far, neither the markets are willing to drop lower. The recent breakout below the intraday support at the level of 89.63 is still within the daily range as the key technical support remains at the level of 89.35. On the other hand, the key technical resistance is seen at the level of 89.96. Neutral bias is being continued untli one of this levels is violated.

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