Global macro overview for 23/03/2016:
The concerns regarding the U.S. manufacturing sector, hit by a stronger dollar and signs of global slowdown, has weakened amid the recent economic data. The Markit's flash manufacturing PMI increased to 51.4 points, up from the final February print of 51.3, but still the reading came lower than expected number of 51.9. It looks like the U.S. domestic producers has been hurt by the Fed's recent rate hike decision, and they are struggling with weakening global demand. The new business volumes are slightly better than expected, but the relatively stronger US dollar makes these volumes still weaker than the post-crisis trend. In conclusion, the first rate hike hasn't not really helped the domestic producers so far and two more rate hikes are anticipated later this year.
Let's now take a look at the technical picture of the US Dollar index on 4H chart. The price is trading now at a very interesting point, which consists of various resistance levels: 61% retracement of the last swing, 38% of the overall retracement, the supply zone, technical resistance and market geometry 1-to-1 resistance of previous corrective cycle. This might be a good place for the bears to took control over the market in the coming days, so please keep an eye on it.
