Global macro overview for 26/05/2017:
Interesting comments from Fed policymaker Leal Brainard regarding the interest rates policy has hit the newswires. In a panel discussion at the Center for Global Development on Thursday, Fed Governor Brainard stated, the "brighter" global economy is posing less risk to the Fed's outlook for the US. "The global economy is brighter than it has been for the last few years," she said in the discussion. Moreover, she added that not only the US economy looks brighter, but the Euro area economy is growing more solidly as well. In conclusion, the positive tone from Brainard suggests the Fed monetary policy towards the interest rate hike did not change since the last meeting and the June meeting interest rate hike is almost certain.
Let's now take a look at the USD/JPY technical picture on the H4 time frame. The USD/JPY pair broke out of a wedge formation, so the price has an open road to 110.50, although it is worth considering small support at the level of 110.85 (May 23rd low). The immediate resistance is now a pierced support around the level of 111.44. Any violation of the level of 110.20 will open the road towards the level of 109.27. Both momentum indicator and stochastic oscillator support the downside bias.
