Global macro overview for 02/10/2017:
Who is going to be the next Federal Reserve Chairperson? How will the US Dollar react to this announcement? There are various speculations among market participants regarding this matter. President Trump reported that he had four meetings on this issue and would make a decision within 2-3 weeks. The Yellen current period as Fed chair ends in February 2018. According to economists, the candidates are: current Chairperson Janet Yellen, Vice President Jerome Powell, Chief Economic Officer Gary Cohn and Kevin Warsh. Not putting too much emphasis on the topic, with all four Janet Yellen is considered the most dovish regarding the future monetary policy. The same Janet Yellen, who a dozen days ago showed great determination for yet another interest rate hike this year and three more in 2018. If we add that the rotation of voting FOMC members next year is toward a more hawkish group, then all of this favors a further increases in US bond yields and ongoing support of USD rally.
Let's now take a look at US Dollar Index technical picture on the H4 time frame. The market is again trying to break through the technical resistance at the level of 93.63, but so far no avail. Moreover, the bullish rally is not being supported by the momentum oscillator and the market conditions are not bullish, but let's say neutral at best. In the other hand, a breakout higher will immediately open the road towards the next resistance at the level of 94.16.
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