Aug 28 – Top Forex Setups to Trade – US Consumer Confidence in Focus
Arslan Butt • 2 min read
The Greenback was mostly steady against a basket of major currencies after the United States and Mexico agreed to amend the North American Free Trade Agreement, boosting confidence for an easing of global trade anxieties. The arrangement put weight on Canada to comply with new terms in order to maintain a three-nation agreement. This would eventually turn back the economic uncertainty created by the POTUS’s renewed fulminations to abandon the 1994 accord.
CB Consumer Confidence
Consumer confidence is expected to be 126.6 in Aug, slightly down from a strong 127.4 version in July. It will be monitored at 14:00 (GMT).
Why Consumer confidence Matters?
Fellas, the financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. For instance, you will spend more only if you are confident about your job or business. It’s pretty logical to say that better than expected data is considered good for the economy.
As forecast in FX Leaders’ Aug 27 report, the dollar index has achieved $94.85 target. It’s gaining a solid support here.
The technical side of the market can determine new trends now. As you can see on the chart, the dollar index is testing a bullish trendline support level of $94.80. The RSI and Stochastics have entered the oversold zone.
Is it a time for bullish reversal? I must say the dollar index is very likely to continue trading bullish above $94.80. The violation of this level can extend sell-off until $94.
USD/CAD – Double Bottom Support
The technical side of the USD/CAD is still bearish as the market broke out of the sideways range of $1.2990 – 1.3090. For now, the same support level of $1.2990 is likely to work as a resistance.
The RSI and Stochastics have plunged below 20 now, which is signalling a strong bearish trend. But at the same time it’s hiking concerns that sooner or later, bulls can jump in to catch the retracement.
USD/CAD – Key Trading Levels
Key Trading Level: 1.2995
USD/CAD – Trading Plan
Today, the idea is to stay bearish under 1.2995 to target 1.2950. Whereas, the bullish breakout of 1.2995 can give us a buying opportunity until 1.3045. Good luck!