Global macro overview for 28/06/2017

Global macro overview for 28/06/2017:

The FOMC policy members were less hawkish yesterday than anticipated, so the dollar index was sliding down. Markets ignored yesterday's higher-than-expected Conference Board consumer confidence index and Richmond Fed index data. In turn, Janet Yellen's speech did nothing new except reiteration of the same statements from the June FOMC meeting. FED will continue its policy of gradual rate hikes in the US. The Fed chairperson also expressed her concerns about historically high valuations of US shares. An interesting remark during the speech was made, when she said: "Can't rule out another crisis but the system is much safer. Don't expect another crisis in our lifetimes". Nevertheless, the FED Chairperson Jannet Yellen still remains dovish and data dependent in her monetary policy statements.

The Minneapolis Federal Reserve President Neel Kashkari, on the other hand, upheld his cautious approach to further US money growth, arguing that the lack of wage pressure does not point to the overheating of the US economy.From his point of view, there is still no rush needed to hike the interest rates as there is no economic indicator that would suggest the US economy risks overheating anytime soon.

Kashkari is a member of this year's Federal Open Market Committee (FOMC), where he has opposed back-to-back rate hikes. On June 14, the Fed voted to raise interest rates by a quarter-point to 1.25%, with officials expecting one more upward adjustment before year's end. The crucial for US Dollar will be next set of data published from the US economy - without their further improvement and rising inflation rates, it will be difficult to justify further rate hikes.

Let's now take a look at the US Dollar technical picture at the H4 timeframe. The price just broke below the technical support at the level of 96.32 and it looks like it is heading towards the next technical support at the level of 95.91. The market conditions are very oversold, so a bounce might occur any time now.