Global macro overview for 21/03/2016: For this week there are still some important pieces of economic data that is due out, with a particular focus on the UK fundamental data release. This week should be quieter mainly because of the upcoming Easter Bank Holiday. Nevertheless, the inflation data on Tuesday and the retail sales figures on Thursday will be watched closely by the Bank of England mainly due to the 2% inflation projection level for 2016. In conclusion, the weak data might initiate the assistance program from the BoE, despite the recent remarks made by Mark Carney. He said that the next central bank move would be more likely to increase the interest rate than to decrease it. Let’s now take a look at the technical picture of the GBP/USD pair at the daily time frame. The market has broken through the golden trend line and currently it is testing it. Moreover, it is trading just below the important support at the level of 1.4438 so the bulls are in complete control overt this market. Only a sustained break out below the level of 1.4051 would change the situation in favor for bears.
In the USA, the Thomson Reuters/University of Michigan preliminary Consumer Confidence Index dropped to 90.0 points in March, down 1.7 points from a month before. According to the report, this unexpected worsening in sentiment was caused by concerns of increasing petrol prices and mounting expenses. Moreover, another important fact is the employment situation and wages: the number of employed people is increasing steadily, but there is no chance for any increase in salaries and wages. In conclusion, the current situation is deteriorating compared to 2000 when the confidence index reached its all-time high at 112.
Let’s now take a look at the US Dollar index technical picture at the daily time frame. The bears seem to be in complete control over this market as the price is trading below the 21.50 and the 100 daily moving averages. Moreover, the price has recently broken below the important technical support at the level of 95.25 and currently the bears are testing this level from below. Any failure here would mean further price decrease towards the next support at the level of 94.05.
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