• US Consumer Sentiment expected to decline in April.
  • Uncertainty, the main reason for shrinking confidence.

This Friday, the US will release the preliminary reading of April's Michigan Consumer Sentiment Index, expected at 100.5 from a previous downwardly revised 101.4 from an initial estimate of 102.0. Still, the 101.4 was the stronger figure since January 2004.  The index is meant to anticipate future economic conditions according to consumers' current sentiment.

The uncertainty triggered by the announcement of US tariffs on imports was the reason why it was downwardly revised in March, and given that uncertainty has been only escalating ever since, chances are of an even worse-than-expected reading, as these days, is not just about trade tensions between China and the US, but also the crisis in Syria and the menace of missile attacks.  The upbeat sentiment of consumers seen in the previous month will likely continue fading in this scenario.

A downward surprise should weight on the greenback, now on the bullish side short-term, but longer-term weak, while a better-than-expected outcome could help the American currency advance further, but with no definitive breakouts at sight.

EUR/USD's price reaction

The common currency has reached what the market sees as dangerous highs, considering the ECB's determination to keep QE in place, and while it can't run, it neither can fall substantially against a vulnerable, unattractive dollar. The result, is the pair trading in a 300 pips range for over two months already, and the US Michigan Consumer Sentiment Index is not the kind of report that can put an end to this situation. Still, it could make some short-term noise.

The pair is currently trading at around 1.2300, with strong supports ahead around 1.2250 and the low set last week at 1.2215. Strong resistances, on the other hand, come at 1.2370 and the 1.2410 region. The closest to any of those extremes ends the pair after the report and ahead of the weekend, the highest the chances of some action news week, always taking into account that sentiment is still the main market motor. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD: Gains appear capped near 0.6580

AUD/USD: Gains appear capped near 0.6580

AUD/USD made a sharp U-turn on Tuesday, reversing six consecutive sessions of gains and tumbling to multi-day lows near 0.6480 on the back of the robust bounce in the Greenback.

AUD/USD News

EUR/USD looks depressed ahead of FOMC

EUR/USD looks depressed ahead of FOMC

EUR/USD followed the sour mood prevailing in the broader risk complex and plummeted to multi-session lows in the vicinity of 1.0670 in response to the data-driven rebound in the US Dollar prior to the Fed’s interest rate decision.

EUR/USD News

Gold stable below $2,300 despite mounting fears

Gold stable below $2,300 despite mounting fears

Gold stays under selling pressure and confronts the $2,300 region on Tuesday against the backdrop of the resumption of the bullish trend in the Greenback and the decent bounce in US yields prior to the interest rate decision by the Fed on Wednesday.

Gold News

Bitcoin price tests $60K range as Coinbase advances toward instant, low-cost BTC transfers

Bitcoin price tests $60K range as Coinbase advances toward instant, low-cost BTC transfers

BTC bulls need to hold here on the daily time frame, lest we see $52K range tested. Bitcoin (BTC) price slid lower on Tuesday during the opening hours of the New York session, dipping its toes into a crucial chart area.

Read more

Federal Reserve meeting preview: The stock market expects the worst

Federal Reserve meeting preview: The stock market expects the worst

US stocks are a sea of red on Tuesday as a mixture of fundamental data and jitters ahead of the Fed meeting knock risk sentiment. The economic backdrop to this meeting is not ideal for stock market bulls. 

Read more

Majors

Cryptocurrencies

Signatures