U.S. Consumer Confidence (15:00 GMT)
Consumer confidence in the world’s largest economy is expected to fall from a revised 65.6 in January to 65.0 in February as fundamental developments begin to gather momentum. Indeed, last month’s report of 65.6 marked the highest reading since March 2008 as sentiment surrounding expectations and the present situation amongst consumers point to optimism in the region.
Though expectations hint to to an improved reading, currency traders should not rule out a lack luster performance in the currency markets subsequent to the release due to the fact that the Conference Board recently announced that it has changed its polling company and methodology. In particular, buying plans were revised higher across all most components. At the same time, there is expected to be adjustments dating back to November 2010, which may have revised seasonal factors.
All in all, tomorrow’s consumer confidence report may paint a clearer picture with regards to current and forward looking expectations; however, gauging sentiment will be as important as the release itself due to fragile conditions in the U.S.
EURUSD 4 Hour Chart
Charts Created Using FXCM’s Strategy Trader – Prepared by Michael Wright
EURUSD: The pair managed to cross over above its descending channel last week and now looks poised to test resistance at 1.38. Indeed, there is major support at 1.36 and failure to break below this level may lead prices back towards the 1.37 area. It is also worth noting that our speculative sentiment index stands at -2.14 and signals for further upside risks.
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Written by Michael Wright, Currency Analyst
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Michael Wright authors FX Headlines, Fundamentals vs. Technical’s, Intraday Trading, Weekly Spotlight, and Forex Trading Weekly Forecast