US CB Consumer Confidence is based on a monthly survey of about 5,000 U.S. households regarding their opinion of the economy. Traders should pay close attention to its release, which always has a strong impact on market prices. A higher reading than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for GBP/USD.
Published on Tuesday at 14:00 GMT.
CB Consumer Confidence is an important gauge of consumer confidence. Increased consumer confidence usually means an increase in consumer spending, a key engine of economic growth. The index jumped to 90.9 points last month, its highest level in close to seven years. This easily beat the estimate of 85.5 points. The markets are expecting another strong reading in July, with the estimate standing at 89.1 points.
Sentiments and levels
August has been just brutal for the pound, which has lost about 300 points against the US dollar. The US recovery continues and barring any sharp downturns, the Federal Reserve is expected to raise rates by mid-2015. GDP for Q2 is expected to be close to 3.9%, and a strong reading could give a broad boost to the US dollar. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.6823, 1.6669, 1.66, 1.6466, 1.6290 and 1.6144
- Within expectations: 87.0 to 91.0: In such a case, GBP/USD is likely to remain within range, with a small chance of breaking higher.
- Above expectations: 91.1 to 94.0: An unexpected higher reading can send the pair below one support level.
- Well above expectations: Above 94.0: A sharp increase in consumer confidence could boost the dollar and push the pair below a second support level.
- Below expectations: 84.0 to 86.9: A reading lower than forecast could push GBP/USD above one resistance level.
- Well below expectations: Below 84.0: In this outcome, the pair could break above a second resistance level.
For more on GBP/USD, see the GBP/USD forecast.
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