The US dollar opened the week on somehow bearish tone, especially against the British pound and the Aussie dollar. Later, it was also seen trading lower against the Euro. One of the reasons for the decline in the US dollar was the recent economic data. The US pending home sales data, services PMI and durable goods orders data missed the market expectation. The overall result pushed the US dollar lower against a basket of currencies.
However, the CB consumer confidence was also released yesterday during the NY session. The outcome was impressive for a change. It caused the US dollar to retrace some of its losses, but the overall impact was already there. The US dollar was seen struggling during the late NY session, as it broke an important support area to trade lower in the short term.
US Durable Goods Orders Report
Yesterday, the first in the line was the US durable goods orders report which was released by the US Census Bureau. The forecast was slated for an increase of 0.5% in September 2014. However, the outcome missed the expectation and as the US durable goods orders decreased $3.2 billion or 1.3 percent to $241.6 billion. Moreover, the US core durable goods orders also declined by 0.2%, compared with the forecast of a 0.5% gain. The data was certainly on the negative side, but it showed an improvement from the previous readings.
There was one more important thing to note i.e. the report highlighted a few revisions for the last readings. The EURUSD pair climbed sharply after the release and managed to settle above the 1.2700 level, which was seen as a bullish sign.
CB Consumer Confidence
The next in line was the CB consumer confidence released by the consumer conference board. The forecast was slated for a rise of 1 point from 86.0 to 87.0. However, the outcome was on the positive side, as the CB consumer confidence registered a rise to 94.5. Moreover, the previous reading was revised up from 86.0 to 89.0. Overall, it was a positive outcome, which lifted the US dollar to a certain extent.
The Conference Board Director of Economic Indicators, Lynn Franco mentioned in the report that “consumer confidence, which had declined in September, rebounded in October. A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation”.
Richmond Fed Manufacturing Index
There was one more release during the NY session i.e. the Richmond fed manufacturing index was released. The outcome was better, as the report mentioned that the Fifth District manufacturing activity expanded in October, according to the most recent survey. It rose from 14 to 20.
Technically, the EURUSD pair managed to pierce the 1.2700-20 area, which can be considered as a bullish sign. However, we need to see more bullish signs before calling a major correction in the pair. On the downside, the 1.2660 area remains a pivotal zone for the pair. Let us see how the pair reacts during the coming days.
So, keep an eye on all the important levels friends and trade accordingly.
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