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 information
  • DXY Index fueled largely by market volatility stemming from fiscal stimulus talks
  • USD worth 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 worth 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 information revealed a 1.9% enhance in spending month-on-month. This not solely topped economist estimates searching for a 0.7% achieve, however 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)

US Retail Sales US Consumer Sentiment Data Chart

Chart Supply: DailyFX Financial Calendar

Preliminary shopper sentiment information elevated sequentially from 80.four to 81.2, which topped market expectations as effectively. Regardless of market volatility stemming from fiscal stimulus and election uncertainty, the advance in shopper sentiment could possibly 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 on account of mounting coronavirus issues and the newest Brexit drama.



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Change in Longs Shorts OI
Each day -5% 3% 0%
Weekly 10% -13% -6%

Nonetheless, USD worth motion nonetheless trades on its again foot in the present day 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 pattern line prolonged by means of the string of decrease highs notched on 19 March, 15 Could and 25 September additionally has potential to maintain the US Greenback underneath stress.

US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (22 APR TO 16 OCT 2020)

DXY Index Price Chart US Dollar Technical Forecast

Chart by @RichDvorakFX created utilizing TradingView

The 50-day easy shifting common and month-to-date lows stand out as doable layers of protection that would stymie USD promoting. Breaching this technical help zone might 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 have a look at final month’s swing excessive earlier than the 96.00-level comes again into focus.

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That each one stated, it seems that market sentiment, which appears to hinge largely on fiscal stimulus negotiations, is one of many larger drivers steering the US Greenback. Rising odds of a democratic sweep this November will increase the potential for a bigger coronavirus support package deal early subsequent yr. In flip, this may preserve USD worth motion slowed down. However, a resurgence of investor uncertainty round fiscal stimulus and the upcoming election may ship the S&P 500-derived VIX Index snapping larger, which might correspond with an increase by the broader US Greenback.

Preserve Studying: S&P 500 Bolstered by VIX Compression as Election Concern Fades

— Written by Wealthy Dvorak, Analyst for DailyFX.com

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