USD Index Futures Test Daily Support

USD Index futures are trading to the bear as the U.S.-session grinds on. Mixed performance across the forex has prompted a retracement of yesterday’s bullish break. For the moment, it appears that the Greenback will observe the Thanksgiving holiday on a retreat.

During today’s U.S. pre-market hours, several peripheral economic metrics were released to the public. Here is a quick look at today’s reports:

Event                                                                Projected    Actual

Continuing Jobless Claims (Nov. 16)             1.635M      1.668M

Durable Goods Orders (Oct.)                          -2.5%            -4.4%

Initial Jobless Claims (Nov. 16)                        215K              224K

Existing Home Sales (MoM, Oct.)                   5.20M          5.22M

Michigan Consumer Sentiment Index(Nov.)  98.3            97.5

This is an interesting group of metrics. U.S. employment is suddenly under pressure and home sales showed rare growth. However, the retail sector slumped mightily amid fading consumer sentiment. Add it all up ― economic performance is slowing down and people are not jubilant about the future.

USD Index Futures

December USD Index futures have taken some heat following the lagging Durable Goods Orders release. However, today’s bearish action isn’t overly alarming as liquidity has been limited following yesterday’s stock market rout.

Overview: At press time, the CME’s FedWatch Index is showing that there is a 75.8% chance of the FED hiking rates in December. This figure is up about 7% from just a few days ago when the pending December rate hike was being questioned. It appears that the markets have dispelled any myths of the FED standing pat and are anticipating the year’s fourth rate hike in just under a month.

All in all, the USD Index is in positive territory and the long-term uptrend is intact. Rates have broken above daily resistance near 96.300. Barring a major turnaround in the FED’s plan for a fourth rate hike, I fully expect the December USD Index to post new yearly highs before contract expiry in mid-December.