UM Consumer Sentiment Index Falls, USD On The Bear
Earlier this morning, the University of Michigan Consumer Sentiment Index (July) lagged both expectations and June's numbers.
It’s been a topsy-turvy day on Wall Street, with equities all over the map. However, the greenback continues to struggle vs the majors, as illustrated by this week’s bullish breakout in the GBP/USD. For the time being, COVID-19, stimulus, and lagging consumer sentiment are smacking the USD.
This morning’s economic calendar was chock-full of peripheral events. Here’s a look at the highlights:
Event Actual Projected Previous
Personal Consumption (MoM, June) 0.4% 0.0% 0.1%
Personal Income (MoM, June) -1.1% -0.5% -4.4%
UM Consumer Sentiment Index (July) 72.5 73.0 73.2
In short, Personal Consumption is up, incomes remain negative, and consumer sentiment is lagging. These items are not inconsistent with the recent spike in COVID-19 cases. And, the issue of lagging Personal Income is likely to be revisited during this weekend’s Congressional stimulus debates. Is it possible that today’s deadline for enhanced COVID-19 unemployment benefits will be extended? You bet. But, if they are, be on the lookout for consistently large jobless claims into the foreseeable future.
UM Consumer Sentiment Falls, Rough Week For The Dollar Vs the Pound
The GBP/USD has been on a tear north for the past two weeks. As a result, exchange rates are now on the doorstep of March’s panic high of 1.3200.
+2020_31+(10_35_31+AM).png)
Going into August trade, there will be one key level on my radar:
- Resistance(1): March 2020 High, 1.3200
Bottom Line: If we see the GBP/USD challenge the March High during early-August, a shorting opportunity will come into play. Until elected, I’ll have sell orders in the queue from 1.3194. With an initial stop loss at 1.3229, this trade produces 35 pips on a standard 1:1 risk vs reward ratio.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals