USD PRICE OUTLOOK: US DOLLAR TURNS HIGHER AFTER RETAIL SALES, CONSUMER SENTIMENT BEAT MARKET EXPECTATIONSUS Greenback superior on
USD PRICE OUTLOOK: US DOLLAR TURNS HIGHER AFTER RETAIL SALES, CONSUMER SENTIMENT BEAT MARKET EXPECTATIONS
- US Greenback superior on the again of month-to-month retail gross sales and shopper sentiment knowledge
- DXY Index fueled largely by market volatility stemming from fiscal stimulus talks
- USD value motion additionally getting strong-armed by main FX friends just like the EUR and GBP
The US Greenback is making an attempt to show larger with USD value motion bouncing off session lows. Month-to-month US retail gross sales and shopper sentiment stories simply crossed market wires, which each beat market forecast. The broader DXY Index perked up after September retail gross sales knowledge revealed a 1.9% enhance in spending month-on-month. This not solely topped economist estimates in search of a 0.7% acquire, nevertheless it is also a marked acceleration from the 0.6% determine beforehand reported.
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DAILYFX ECONOMIC CALENDAR – US RETAIL SALES (SEP) & CONSUMER SENTIMENT (OCT)
Chart Supply: DailyFX Financial Calendar
Preliminary shopper sentiment knowledge elevated sequentially from 80.four to 81.2, which topped market expectations as properly. Regardless of market volatility stemming from fiscal stimulus and election uncertainty, the advance in shopper sentiment might be boosting the US Greenback in opposition to main counterparts just like the Euro and Pound Sterling, which have not too long ago confronted headwinds resulting from mounting coronavirus considerations and the newest Brexit drama.
| Change in | Longs | Shorts | OI |
| Day by day | -5% | 3% | 0% |
| Weekly | 10% | -13% | -6% |
Nonetheless, USD value motion nonetheless trades on its again foot at present judging by the broader US Greenback Index. The DXY Index has struggled to reclaim the 94.00-price degree underpinned by August swing highs and final month’s closing vary. A bearish development line prolonged via the string of decrease highs notched on 19 March, 15 Could and 25 September additionally has potential to maintain the US Greenback beneath strain.
US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (22 APR TO 16 OCT 2020)
Chart by @RichDvorakFX created utilizing TradingView
The 50-day easy shifting common and month-to-date lows stand out as attainable layers of protection that might stymie USD promoting. Breaching this technical help zone may encourage US Greenback bears to push the Dollar towards multi-year lows once more close to the 92.10-mark. Conversely, eclipsing the 94.00-handle may encourage bulls to have a fast take a look at final month’s swing excessive earlier than the 96.00-level comes again into focus.
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That every one mentioned, it seems that market sentiment, which appears to hinge largely on fiscal stimulus negotiations, is one of many greater drivers steering the US Greenback. Rising odds of a democratic sweep this November will increase the potential for a bigger coronavirus help package deal early subsequent yr. In flip, this may hold USD value motion slowed down. Alternatively, a resurgence of investor uncertainty round fiscal stimulus and the upcoming election may ship the S&P 500-derived VIX Index snapping larger, which may correspond with an increase by the broader US Greenback.
Preserve Studying: S&P 500 Bolstered by VIX Compression as Election Worry Fades
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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