Global macro overview for 20/04/2018

Some pretty decent pack of macroeconomic data from the US was published recently. Weekly unemployment fell to 232k applications (versus estimated 230k), and Philly FED Manufacturing Index rose to 23.2 points in April instead of falling by 20.1 points from a high of 22.3 points last month. Index of leading indicators in the economy (US Conference Board Index ) for March fell as expected (0.3%).

The balance of the week for the US Dollar starts to look quite good - Friday is the fourth consecutive day increase in the US Dollar Index and the strengthening of the dollar can also be seen today in the broad market. The rising yields of US bonds are starting to support, which may be the result of a growing conviction that FED members may be leaning towards 4 interest rate hikes this year if they are given pretexts in the form of good macroeconomic data in the coming months. Noteworthy in this respect were the words of William Dudley from the FED branch in New York, which in a nutshell indicated that the FED should consistently do its work by bringing interest rates relatively quickly to the neutral level. Nevertheless, the dollar will need a stronger reason to be resisted by significant resistance, and May may be planned for May on key US data (ISM indices and Labor Department readings), although in the coming week the dollar may be stronger due to weakness of other currencies - the euro, pound and possibly also yen.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has broken through the technical resistance at the level of 89.96 (now support) and it looks like is heading towards the next technical resistance at the level of 90.29. The strong momentum and positive stochastic indicators are supporting the short-term bullish outlook.

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