Global macro overview for 28/02/2017:

Two interesting remarks from the US hit the newswires overnight. The first came from Dallas FED President Robert Kaplan, who reiterated his view that the FED should move "sooner rather than later". Recent FED speakers and US data are indicating that the probability of a rate hike is increasing. This view is being supported by CME FedWatch Tool, where we can see the odds for a rate hike are now at the level of 68% for .025% hike and 31% for 0.50% hike. The second important remark comes from the U.S. President Donald Trump, who is trying to increase the US military spending up to the "historic" level of $603 billion (a mere 3% more than $586 billion during Obama administration). Nevertheless, the plan came under fire from Democratic lawmakers, who said cuts being proposed to pay for the additional military spending would cripple important domestic programs such as environmental protection and education.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The false break out above the technical resistance at the level of 1.0617 was short lived and now the market gets back to the trading range between the levels of 1.0550 - 1.0617. The trading conditions look overbought and the growing bearish divergence is indicating that the technical support at the level of 1.0550 might be tested very soon.