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 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 fell to 95.7 points in February, short of the estimate in 97.9 points. This marked the lowest level since November 2016. Another strong reading is expected in the January report, with a reading of 97.9 points.
Sentiments and levels
The Fed raised rates but went for a dovish hike, sending the USD down (here are the 5 dollar downers). In the euro-zone, a favorable outcome in the Netherlands as well as some hawkish sounds from the ECB pushed EUR/USD higher. But can it last?. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.0950, 1.0870, 1.0775, 1.0650, 1.0615 and 1.0570
5 Scenarios
- Within expectations: 98.0 to 102.0: In such a case, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 102.1 to 106.0: An unexpected higher reading can send the pair below one support level.
- Well above expectations: Above 106.0: The chances of such a scenario are low. Two or more support lines could be broken on such an outcome.
- Below expectations: 94.0 to 97.9: A weak reading could push the pair upwards, and one resistance level could be broken.
- Well below expectations: Below 94.0: In this scenario, EUR/USD could break above two or more resistance levels.
For more on the euro, see the EUD/USD forecast.
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