28.10.201610:45 Forex Analysis & Reviews: Global macro overview for 28/10/2016

Global macro overview for 28/10/2016:

The main economic event for today will be US Prelim GDP data which is due at 12:30pm GMT. The Bloomberg median consensus is at 2.6% (q/q annualized), a nice increase from 1.5% for the last quarter. There is also the quarterly Employment Cost Index data, which is expected to remain at +0.6%, whilst the Michigan Sentiment for October is expected to be revised mildly higher to 88.1 (from the preliminary reading of 87.9). Market participants are anticipating a strong boost in GDP, especially from net exports, consumer spending, and capital expenditures. In conclusion, very important reports, especially real spending and price index, will be released next week. They will clearly signal the Fed's rate hike in December.

Let's now take a look at the US Dollar index technical picture in the daily time frame ahead of the news release. Dollar bulls remain strong as the price is still trading above the technical support at the level of 98.58. Any reading better than expected will eventually push the price even higher towards the next technical resistance at the level of 99.84.