The University of Michigan Consumer Sentiment Index surveys consumer attitudes and expectations about the US economy. An increase in consumer confidence is a positive sign about the health of the economy and is bullish for the US dollar.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Friday at 14:00 GMT.
Indicator Background
The UoM Consumer Sentiment Index, which is released monthly, is an important leading economic indicator. It helps measure future spending behavior, and provides an indication of consumer confidence in the economy. Analysts look to the index to help answer that all-important question of “is the US consumer optimistic or pessimistic about the economy”?
The index jumped to 95.8 points in April, marking a 13-month high. The markets are expecting the indicator to reverse directions and soften in the May report, with an estimate of 94.1 points.
Sentiments and levels
The US dollar took a beating last week, as the dismal NFP report shocked the markets. Still, a US July hike cannot be discarded, at least not now. However, at the moment we might see the pair get comfortable on much higher ground. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.15, 1.1460, 1.1375, 1.1335, 1.1230 and 1.1175.
5 Scenarios
- Within expectations: 91.0 to 97.0: In such a case, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 97.1 to 101.0: An unexpected higher reading can send the pair below one support level.
- Well above expectations: Above 101.0: The chances of such a scenario are low. Two or more support lines could be broken on such an outcome.
- Below expectations: 87.0 to 90.9: A poor reading could push the pair upwards, and one resistance level could be broken.
- Well below expectations: Below 87.0: A sharp drop in consumer confidence would likely hurt the dollar, and EUR/USD could break above two or more resistance levels.
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