Search ForexCrunch

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.

Update:  US Consumer Sentiment slightly misses with 90.4


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 dipped to 89.5 points in June, short of the estimate of 93.7 points. The July report is expected to improve, with a forecast of 93.7 points.

Sentiments and levels

The Eurozone economy continues to struggle and inflation levels are very low. The BOE easing has added pressure on the ECB to take action. In the US, the sparkling payrolls report has given the dollar a broad boost. So, the overall sentiment is bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.1335, 1.1230, 1.1190, 1.1140, 110.70 and  1.10

5 Scenarios

  1. Within expectations: 90.0 to 98.0: In such a case, EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 98.1 to 102.0: An unexpected higher reading can send the pair below one support level.
  3. Well above expectations: Above 102.0: The chances of such a scenario are low.  Two or more  support lines  could be broken on such an outcome.
  4. Below expectations: 86.0 to 89.9: A poor reading could push the pair upwards, and one resistance level could be broken.
  5. Well below  expectations:  Below 86.0: A sharp  drop in consumer confidence would likely  hurt the dollar, and EUR/USD could break above  two or more resistance levels.