Trading the News: U. of Michigan Confidence
Updates to the U. of Michigan Confidence survey might undermine the U.S. dollar strength following the Federal Reserve meeting because the index is anticipated to slender to 97.9 from 98.6 in October.
Signs of waning family sentiment might push the Federal Reserve to undertake a less-hawkish tone because it casts a weakened outlook for private-sector consumption, one of the main drivers of development, and a dismal growth might start to sway the financial coverage outlook because it dampens bets for above-neutral rates of interest.
In flip, one other downtick within the U. of Michigan survey might spark a bearish response within the U.S. greenback, however an surprising enchancment in shopper confidence might maintain EUR/USD underneath strain because it encourages the Federal Open Market Committee (FOMC) to additional embark on its hiking-cycle over the approaching months. Sign up and join DailyFX Currency Analyst David Song LIVEto cowl the U. of Michigan survey.
Impact that the U. of Michigan Confidence survey has had on EUR/USD over the last print
(1 Hour publish occasion )
(End of Day publish occasion)
10/12/2018 14:00:00 GMT
October 2018 U. of Michigan Confidence
EUR/USD 5-Minute Chart
The U. of Michigan Confidence survey unexpectedly weakened in October, with the index slipping to 99.0 from 100.1 the month prior. A deeper take a look at the report confirmed the gauge for future expectations additionally slipping to 89.1 from 90.5, whereas 12-month inflation expectations climbed to 2.8% from 2.7% throughout the identical interval.
The combined developments spurred a combined response within the greenback, with EUR/USD shortly bouncing again from the 1.1530 area to shut the day at 1.1557. Review the DailyFX Advanced Guide for Trading the News to study our 8 step technique.
EUR/USD Daily Chart
- Near-term outlook for EUR/USD stays capped by the 1.1810 (61.8% retracement) hurdle, with the alternate charge in danger of monitoring the broad vary carried over from the summer time months because it snaps the collection of increased highs & lows from earlier this week.
- The failed try to push again above the 1.1510 (38.2% growth) area brings the 2018-low (1.1301) again on the radar, with a break/shut beneath 1.1290 (61.8% growth) elevating the chance for a transfer in the direction of the 1.1220 (78.6% retracement) space.
For extra in-depth evaluation, try the Q4 Forecast for EUR/USD
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— Written by David Song, Currency Analyst
Follow me on Twitter at @DavidJSong.