Skip to main content

Is it safe to buy the US dollar after today’s consumer confidence data?

By: Invezz

Last week financial markets focused on Chairman Powell’s Jackson Hole speech released on Friday. Similarly, this week’s most important event is scheduled on Friday, too – the Non-Farm Payrolls report.

The speech was short but hawkish, contrasting with what the market understood after the previous FOMC meeting. As such, the US dollar jumped across the board, with the USD/JPY closing the week near its recent highs.

So will the US dollar continue its rally? One thing is for sure – the CB Consumer Confidence data released earlier today points to further strength for the US currency.

US consumer remains resilient

Today’s US session began with the CB Consumer Confidence release. This is nothing but a survey of about 3,000 households asking about changes in current and future economic, labor, and business conditions.

Put simply, it is an indicator of the overall economic situation, and a critical release for traders as consumer spending is the engine of economic growth.

The economists have forecast 97.6, but the actual data surprised everyone, out at 103.2. The better-than-expected data shows a resilient US consumer; thus, the chances of an upcoming economic recession decrease significantly.

Hence, the Federal Reserve will stay on its path of further hiking the interest rates, which is bullish for the US dollar.

Bullish flag points to further USD/JPY advances

One of the markets that reacted most to today’s US data was the USD/JPY. The currency pair consolidated in a bullish flag formation after reaching 139 earlier in the week.

The market looks bullish, with only one trading day left in the month. The bullish flag pattern points to a continuation of the recent trend higher, and the measured move, seen in blue on the chart above, points to a quick move above 141.

The post Is it safe to buy the US dollar after today’s consumer confidence data? appeared first on Invezz.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.