FX.co ★ Global macro overview for 10/02/2016

Global macro overview for 10/02/2016:

Fed Chair Janet Yellen will testify in front of the House Financial Services Committee at 03:00pm GMT today. Financial market participants will be very sensitive to any remarks given by her regarding the short-term interest rate expectations. After the recent negative NFP figure, it will be interesting to know how this year's events have altered the central banks' expectations. According to CME Group Fed Fund Futures, the market is now pricing out 79% of chance that the rate will be still 0.5% at December 2016, which means the probability of a rate hike in 2016 dramatically dropped since the last Fed meeting. In conclusion: please keep an eye on today's Yellen testimony as it might play an important role in interest rate expectations.

Let's now take a look at the technical picture of the EUR/USD pair on the H4 chart. The pair moved slightly above the level of 1.1300 and the market is unlikely to go any lower as bulls are still in control. However, the level of 1.1238 is a good one to keep an eye on as any breakout lower might encourage bears to add momentum and regain the control.