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The Conference Board Consumer Confidence Index is based on a monthly survey of about 5,000 households regarding their opinion of the economy. Its release always has a strong impact on market prices.

Here are all the details, and 5 possible outcomes for USD/JPY.

Published on Tuesday at 14:00 GMT.

Indicator Background

The CB Consumer Confidence Index provides readings  on one of the most critical components of the economy, consumer confidence and spending. The index’s direction and rate of change are carefully scrutinized by analysts and traders looking for an indication of which direction the economy is headed. A higher reading than the previous month points to a growing economy and may push the dollar upwards.

After  a slight  improvement in July with a reading of 59.5, the index plummeted to 44.5, its lowest reading since April 2009. The forecast for September is 46.4, reflecting continued weak consumer confidence in the US economy.

Sentiments and levels

The dollar made gains against the major currencies after the Federal Reserve confirmed “Operation Twist”. However, both the US and Japanese economies are doing poorly and investors continue to view the yen and the dollar as safe haven currencies. So, the overall sentiment is neutral on USD/JPY towards this release.

Technical levels, from top to bottom: 78.50, 77.85, 77, 76.25, 75.95, and 75.

5 Scenarios    

  1. Within expectations: 42.0 to 51.0: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 51.1 to 57.0: An unexpected higher reading can send USD/JPY above one resistance level.
  3. Well above expectations: Above 57.1: A sharp increase in consumer confidence could propel the pair above two resistance levels or more.
  4. Below expectations: 35.0 to 41.9: A reading lower than forecast could send USD/JPY below one support level.
  5. Well below expectations: Below 34.9: Due to the ongoing weakness of the US economy, a sharp decline remains a possibilty. In this outcome, the pair would likely drop below two or more support levels.

For more on USD/JPY, see the USD/JPY forecast.

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