It has been a relatively quiet open to FED week, featuring moderate action across the forex and equity markets. The U.S. indices have opened near flat, as have June USD Index futures. At this point, “stay the course” appears to be the order of the day.
During the pre-Wall Street open, a collection of U.S consumption metrics came across the wires. As of yet, the reports haven’t done much to move the forex needle. Here is a quick look at the data:
Event Actual Projected Previous
Core Personal Consumption (MoM, Feb.) 0.1% 0.1% 0.1%
Core Personal Consumption (YoY, Feb.) 1.7% 1.7% 1.8%
Personal Income (MoM, March) 0.1% 0.4% 0.2%
Personal Spending (March) 0.9% 0.7% 0.1%
Perhaps the biggest takeaway from this group of stats is the divergence between Personal Income and Personal Spending for March. In short, spending is up and income is down. This isn’t healthy and will lead to the additional swelling of the already-bloated U.S. consumer debt market. Spending vs income is a relationship to keep an eye on in the coming months.
June USD Index Futures: Technical Outlook
Last Friday was a big session for June USD Index futures. Rates rallied to fresh yearly highs above 98.000 before falling back to relative stability just above 97.500. The new trading week has brought a tight intrasession range and rotation near 97.500.
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Here are the levels to watch going into Wednesday’s meeting of the FED:
- Resistance(1): Psyche Level, 98.000
- Support(1): 38% Current Wave Retracement, 97.430
Overview: The fundamentals this week will be important. A FED meeting, as well as the kickoff of a new calendar month, will play key roles in dollar valuations.
However, the long-term uptrend of 2019 remains intact for the June USD Index. On a daily time frame, the bullish trend of April has been robust and is also valid. Technically, all signs point to further price extension north for the USD Index.
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