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 15:00 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 the level of optimism of the US consumer. The indicator is closely watched by analysts, as consumer confidence is closely linked to consumer spending, a key driver of economic growth.
The index dipped for a second straight month in October, falling to 87.9 points. The downward trend is expected to continue in November, with a forecast of 87.4 points.
Sentiments and levels
The fundamentals continue pointing to the downside, as the ECB is set to add easing while the Fed is on course to raise rates in December. Donald Trump’s stunning election win this week has led to turmoil in the markets, but so far the greenback has come out on top.
Technical levels, from top to bottom: 1.1070, 1.10, 1.0960, 1.0850, 1.0780 and 1.0710
5 Scenarios
- Within expectations: 84.0 to 91.0: In such a case, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 91.1 to 95.0: An unexpected higher reading can send the pair below one support level.
- Well above expectations: Above 95.0: The chances of such a scenario are low. Two or more support lines could be broken on such an outcome.
- Below expectations: 80.0 to 83.9: A poor reading could push the pair upwards, and one resistance level could be broken.
- Well below expectations: Below 80.0: A sharp drop in consumer confidence would likely hurt the dollar, and EUR/USD could break above two or more resistance levels.
For more on the euro, see the EUD/USD forecast.
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