Global macro overview for 30/11/2018

During the Thursday session, the global investors got to know minutes from the Federal Open Market Committee meeting (FOMC) after their meeting on November 8, during which no decision was made to raise interest rates. Representatives of the Committee are convinced that this will take place "relatively quickly", so for the market, it means December this year and is undoubtedly a hawkish statement. However, the probability of this increase has long been discounted and is "included in the price" of the US dollar. What's more, in favor of the doves is also the fact that during subsequent meetings, FOMC members want to put more emphasis on the assessment of macroeconomic data coming from the market when making decisions on interest rate increases. Concerns were also expressed about the current, quite high rate of interest rate growth.

Publication of the FOMC protocols was closely followed by the market, inter alia, due to yesterday's speech of the President of the FED, Jerome Powell. No one expected the dovish overtones of his speech. It can be concluded that the Fed may start the process of normalization of monetary policy next year: "Interest rates are still low by historical standards, but they are only slightly under the broad spectrum of forecasts for the level of neutral rates for the economy," Powell said. The head of the FED hardly mentioned the gradual rate hike, and when he did, he spoke in the past tense.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market did not react much to the news as the price has entered the horizontal zone seen between the levels of 96.67 - 97.03 and remained there since the event. The nearest technical support is seen at the level of 96.32, just below the dashed violet trend line support. On the other hand, the nearest technical resistance is seen at the level of 97.03 and if violated, then the uptrend might resume and the bulls will target the level of 97.56. Momentum remains neutral, but the oversold market conditions support the short-term bullish outlook.

analytics5c00e2a1de11b.jpg

The material has been provided by InstaForex Company - www.instaforex.com