The Conference Board Consumer Confidence Index is based on a monthly survey of about 5,000 households regarding their opinion of the economy. Its release always has a strong impact on market prices. A reading which is higher than expected is bullish for the US dollar.
Here are all the details, and 5 possible outcomes for USD/JPY.
Published on Tuesday at 14:00 GMT.
Indicator Background
The CB Consumer Confidence Index gauges the level of US consumer confidence, a key component of economic activity. An unexpected reading can have a major impact on the movement of USD/JPY.
After a June reading of above 100 points, the indicator slipped to just 90.9 in July, well off the estimate of 100.1 points. The forecast for the August report stand at 92.8 points.
Sentiments and levels
The yen posted excellent gains last week, as the US dollar had a surprisingly poor week against the yen. Will we see a correction from the pair this week? Strong housing and manufacturing US numbers late last week could boost the greenback against the yen early this week. So, the overall sentiment is bullish on USD/JPY towards this release.
Technical levels, from top to bottom: 122.01, 121.39, 120.65, 119.65, 118.68, and 117.44.
5 Scenarios
- Within expectations: 90.0 to 96.0: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 96.1 to 99.0: An unexpected higher reading can send USD/JPY above one resistance level.
- Well above expectations: Above 99.0: A sharp increase in consumer confidence could propel the pair above two or more resistance levels.
- Below expectations: 86.0 to 89.9: A reading lower than forecast could send USD/JPY below one support level.
- Well below expectations: Below 86.0: Due to the ongoing weakness of the US economy, a sharp decline remains a possibility. In this outcome, the pair could drop below two or more support levels.
For more on USD/JPY, see the USD/JPY forecast.
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