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- U. of Michigan Confidence Survey to Increase for Fifth Consecutive Month.
- Print of 89.5 Would Mark Highest Print Since July 2007.
Trading the News: U. of Michigan Confidence
Another uptick in the U. of Michigan Confidence survey may spur a further decline in the EUR/USD amid growing speculation for a Fed rate hike in mid-2015.
What’s Expected:
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Why Is This Event Important:
Positive data prints coming out of the U.S economy should continue to fuel interest rate expectations and heighten the bullish sentiment surrounding the greenback as a growing number of Fed officials scale back their dovish tone for monetary policy.
Expectations: Bullish Argument/Scenario
| Release | Expected | Actual |
| Advance Retail Sales (MoM) (NOV) | 0.4% | 0.7% |
| Non-Farm Payrolls (NOV) | 230K | 321K |
| Average Weekly Earnings (YoY) (NOV) | 2.1% | 2.1% |
Consumer sentiment may climb to a seven-year high on the back of faster job/wage growth, and a further improvement may generate another decline in EUR/USD amid the deviation in the policy outlook.
Risk: Bearish Argument/Scenario
| Release | Expected | Actual |
| Consumer Credit (OCT) | $16.500B | $13.226B |
| Personal Consumption Expenditure Core (YoY) (OCT) | 1.5% | 1.6% |
| Consumer Price Index Core (YoY) (OCT) | 1.7% | 1.8% |
However, we the survey may disappoint as U.S. households face sticky price pressures paired with the ongoing slack in the real economy, and a dismal print may spur a larger correction in the greenback as it drags on expectations for higher borrowing-costs.
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How To Trade This Event Risk(Video)
Bullish USD Trade: U. of Michigan Survey Climbs to 89.5 or Higher
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Need to see red, five-minute candle following the release to consider a short trade on EURUSD
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If market reaction favors a long dollar trade, sell EURUSD with two separate position
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Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
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Move stop to entry on remaining position once initial target is hit; set reasonable limit
Bearish USD Trade: Consumer Confidence Falls Short of Market Forecast
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Need green, five-minute candle to favor a long EURUSD trade
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Implement same setup as the bullish dollar trade, just in the opposite direction
Potential Price Targets For The Release
EUR/USD Daily Chart
Chart - Created Using FXCM Marketscope 2.0
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Failed attempts to close above 1.2450-70 may highlight near-term topping process for EUR/USD especially as the RSI largely retains a bearish momentum.
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Interim Resistance: 1.2600 pivot to 1.2610 (61.8% expansion)
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Interim Support: 1.2280 (100% expansion) to 1.2290 (38.2% expansion)