Global macro overview for 25/02/2016:
The Fed policy makers remain divided on future interest rate hikes.There are some optimistic tones in the recent remarks, so let's see what some of them has to say. The biggest optimist seems to be the newly appointed head of Minneapolis Fed, Neel Kashkari. He said, that he is optimistic about the US economy, which continues to grow moderately as the year progresses, adding that he sees both upside and downside risks to the growth outlook. Jeffrey Lacker, Richmond Fed President, said that the US central bank still has room to raise rates in coming months, as there are no signs of imminent recession. Moreover, he added that even though inflation remains below Fed's target of 2%, inflation indicators suggest a possible move back toward the goal over the period between 5 and 10 years. Meanwhile, Robert Kaplan, Dallas Fed President, said that he does not expect the US economy to slip into recession this year, yet he advises a patient and cautious approach to policy normalization given the global headwinds. The conclusion we might draw from the recent remarks of Fed's policy members seems to be favoring further rate hikes.
Let's now take a look at the US dollar index technical picture as the Fed policy will directly relate to this asset. On a daily chart, we might observe that bulls are trying to remain in control after the bounce from the golden trend line. Bulls managed to break out above the technical resistance at the level of 97.18, but were capped ahead of 100 DMA. Currently, the market is trading just in the middle of a range, so both sides of the market, bulls and bears, have equal chances to push the price towards the desired levels.