Global macro overview for 10/10/2018

FED Chairman Jerome Powell gave recently speech in Indonesia. He said that the US labor market is "very strong" and inflationary pressure is not yet visible. Transparency and open communication are the keys to minimizing the global misunderstanding of policies and market problems.

The normalization of monetary policy is beneficial for everyone because it reduces the imbalance in the financial markets. So far, the United States has not been repulsed by the Chinese in the trade war. Williams believes that there is currently a large disproportion between the economic situation in the US and the rest of the world. Nevertheless, the FED will likely continue to increase the interest rates as the economy prosper. According to CME FED watch tool, the target possibilities for 8th November FOMC meeting are at the level of 98% for a rate range of 2.00-2.25%, but for the 19th December FOMC meeting are at the level of 81% for a rate hike to 2.5.%.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The price of the dollar slightly weakened last night against the euro, but rather it was not influenced by the words of the FOMC member. EUR/USD has found a few pips above 1.15. The next technical resistance is seen at the level of 1.1543 - 1.1550. The momentum is currently neutral as the RSI is on its fifty level, but the move up is a rection for the bullish divergence between the price and momentum. Please notice, the market is bouncing from the oversold conditions, so the move up might be only short-lived.

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