- The market remains vulnerable after North Korea’s provocation
- Gold, yen surge as investors shun risk. EURUSD continues its rally
- The upcoming session lacks important macroeconomic reports
The European currency continues its rapid rise as geopolitical tension rose after North Korea launched another missile. What’s important, the move on the cross comes despite a lack of important macroeconomic data and just ahead of the crucial jobs report from the United States. Today, however, the move could continue as we will only know the consumer confidence from Conference Board.
The Conference Board publishes its monthly Consumer Confidence Index reading Tuesday shortly after the US market opens, and some strategists are expecting to see a pickup after a slight decline. The index is particularly important for the stocks market because of its correlation with the SP500. As long as the Consumer Confidence Index does not see a “significant” drop for the month of August, one should expect to see stocks continue rising. According to Bloomberg estimates, economists are largely forecasting a reading of 120.3, a slight decline from last month’s reading of 121.1.
A greater fall in consumer confidence could spur another wave of buying on the EURUSD. Looking at the chart we may notice that the cross has broken above an important level of resistance at 1.20 that was also an important psychological level. What’s more, the move could continue towards 1.25 as there’s no resistance ahead. The ultimate goal for the buyers should be at 1.30. However, one should also notice that the daily RSI is back above 70, which could signal that the market is overbought.
The EURUSD breaks above 1.20 for the first time in almost 3 years. More gains could come as the next resistance is at 1.25.