07.12.2017 03:01 PM
Global macro overview for 07/12/2017

In general terms, the currency market is calm in the last days and the main currency pairs respect the existing consolidation zones. One can see a lack of willingness to be more strongly involved in the direction, waiting for the situation to clear up on the subject of the US tax law, NFP, and Brexit negotiations.

In the last hours around USD there is more hope than worries, which helps in improving prices. This is not a fundamental change of attitude, as there is no consistent movement on the yields of government bonds (10-year olds are at 2.34% against 2.40% at the beginning of the week). However, the incoming information is supportive. Republicans from both chambers of Congress seem determined to quickly prepare a uniform text of the tax bill and even before the holidays, give it to the president to sign. Wednesday brought the start of talks between the delegates of both houses. Even if the direct benefits of the USD bill are debatable, at least for the time being this is the reason for the positive sentiment around the currency. In addition, everything points to the fact that Congress will be able to adopt another resolution for budget financing by the end of the week, ie to dismiss the so-called "government shutdown". Finally, the ADP report in point showed an increase in employment in November by 190k workers and well ahead of the government's NFP report tomorrow. So far, so good for US Dollar.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has managed to break out above the green dashed trend line and above the technical resistance at the level of 93.51 ( now support). The momentum is positive and strong, so the next technical resistance to hit is seen at the level of 94.03 and 94.26.

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