US Dollar Shows Timid Signs of Recovery. U.S. Consumer Confidence Eyed for Next Move

Forex News: Yesterday’s trading session was controlled by the bears for the most part and the pair retraced lower but without threatening the support at 1.1616. European data missed the market consensus and this contributed to the currency’s weakness.

The move down seen yesterday is very normal after a strong move up like the one seen last week and we expect current downside momentum to extend into 1.1616. That’s a place where bullish movement could resume and if this is the case, we expect to see a push into the recently formed resistance around 1.1680 – 1.1685. If this resistance is broken, we expect to see a stronger move down when the pair reaches 1.1713, which is a level last visited in August 2015.

Today’s highlight is the U.S. Consumer Confidence survey, released at 2:00 pm GMT. The survey is derived from the opinions of about 5,000 households regarding business conditions, job availability and economic conditions overall, and acts as a leading indicator of consumer spending, thus higher numbers usually strengthen the US Dollar. Today’s forecast is a reading of 116.2, lower than the previous 118.9.

The pair maintained a bullish bias throughout yesterday’s trading session and moved above the key psychological level at 1.3000 but was capped by 1.3030 resistance.

The pair is trading above the 50 period Exponential Moving Average and above the important level at 1.3000, without being overbought. All clues point towards an extended move to the north but currently there are signs of rejection around the resistance at 1.3030, so we may see a revisit of 1.3000. Our bias is mostly bearish if resistance cannot be broken with determination. 

Today we don’t have anything major in terms of British economic releases, so the pair’s direction will be decided by technical factors and by the U.S. survey mentioned earlier.