Global macro overview for 09/07/2015
The Federal Open Market Committee (FOMC) meeting minutes released on June 17 showed the committee's uncertainty regarding the US economic growth. An expected rate hike will be postponed until further economic data improvement. The market interpretation of this dovish statement was immediate and the US Dollar Index dropped significantly with USD/JPY sell-off as a leader. Please notice that the FOMC meeting took place hree weeks ago and the committee was not aware of what is going on today. Thus, Greece is on the brink of leaving the EU ( if it can not reach the deal with the creditors) and the Chinese stock market is collapsing ( despite the government restricting short selling). This is why the Fed studies multiple economic data to be digested before its next meeting in September. Nevertheless, the rate hike is being pushed away until the economic conditions improve significantly.
From the technical point of view, the US Dollar Index has broken above the golden trendline and now it is testing it from below. Any move below this trendline will be considered a fake breakout and the recent swing lows at the level of 94.00 might be tested soon. On the other hand, a healthy bounce here would mean the market is about to test the resistance at 97.80. A breakout higher is not excluded as well.