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Key Insights
- Preliminary University of Michigan sentiment data for October signals a shift with rising inflation projections.
- U.S. Dollar maintains bullish posture, staying above its 106.30 benchmark.
- EUR/USD trend leans bearish, especially below the $1.0558 threshold.
Dollar Rises: UMich Data Shows October Sentiment Shift
Amid a sea of financial forecasts, the Dollar stands out, breaking free from its downward trajectory and marking a notable 0.20% surge. The recent preliminary UMich consumer sentiment data for October 2023 throws light on this development. The prior sentiment stood at 68.1, with current conditions falling short of expectations, registering at 66.7 compared to the anticipated 70.4 (71.4 previously). Expectations, too, dipped to 60.7 from the prior 66.0, against a forecast of 65.5.
Notably, inflation projections for the coming year have ascended to 3.8%, up from the previous 3.2%, while the 5-10-year projection stands at 3.0%, a slight increase from the 2.8% previously noted. Though one might argue against the validity of this survey – attributing the rise perhaps to fluctuating gasoline prices – market stakeholders are bound to view this data with trepidation.
U.S. Dollar
Dollar Index (DXY) 4h Chart
On October 13, the U.S. Dollar Index (DXY) showcased a commendable performance, registering at 106.70, marking an uptrend of 0.15%. This robust movement was significantly noted after it managed to shatter a downward channel on its daily chart. When observed on a 4-hour chart timeframe, several key price levels come to the fore.
The pivot point stands firmly at 105.43. While immediate resistance is encountered at 107.62, the following resistances are spotted at 109.02 and 111.14, respectively. On the flip side, support levels are evident at 104.01, 103.01, and further down at 101.86.
The RSI (Relative Strength Index) currently reads 65, suggesting a bullish sentiment as it’s above 50. The 50-day Exponential Moving Average (EMA) is priced at 106.23, indicating the price is above the 50 EMA, hinting at a short-term bullish trend.
To wrap up, the Dollar’s overall trend appears bullish as long as it remains above 106.30.
EUR/USD
EUR/USD 4h Chart
On October 13, the EUR/USD pair presented a notable picture on the 4-hour chart. The currency pair’s pivotal point was recognized at 1.0489. As we move up the scale, resistances were spotted at 1.0545, 1.0642, and further at 1.0698.
Conversely, support levels have been drawn at 1.0392, followed by 1.0338 and 1.0282. The Relative Strength Index (RSI) stands at 38, indicating a bearish sentiment since it’s below the 50 mark. Furthermore, the Moving Average Convergence Divergence (MACD) shows a value of -0.0011 and its signal line at -0.0060.
A significant observation here is the 50-day Exponential Moving Average (EMA) priced at 1.0568, with the EUR/USD recently retesting its support-turned-resistance level at $1.05588. A bearish engulfing candle below this level strengthens the bearish outlook. In conclusion, the trend is bearish for EUR/USD below $1.0558.
GBP/USD
GBP/USD 4h Chart
On October 13, the GBP/USD exhibited a striking downward motion on the 4-hour chart, trading at 1.2136, marking a decline of nearly 0.45%. Key price levels highlighted a pivot point at 1.2179. The resistance levels were identified at 1.2321, 1.2403, and 1.2545, while support was at 1.2098, then 1.1955, and further down at 1.1871.
The RSI sat at 40, pointing towards a bearish sentiment, with the MACD showing values of -0.0016 and its signal line at -0.0006. Interestingly, the 50-day EMA stood at 1.2226.
In terms of chart patterns, GBP/USD breached the upward channel that had been its support around $1.2222. With the 50 EMA now acting as a staunch resistance, a close below this could drive the Sterling further down. In conclusion, the trend is distinctly bearish for GBP/USD below 1.22272.
USD/CAD
USD/CAD 4h Chart
On October 13, the USD/CAD showcased a bearish trend on its 4-hour chart, with the Loonie slipping 0.20% against the USD, positioning itself at 1.3660. Essential price thresholds determined a pivot at 1.3670. Resistance lay at 1.3778, followed by 1.3894, then at 1.4002.
Conversely, the support was identified at 1.3553, further dropping to 1.3446 and lastly at 1.3329. The RSI was pegged at 57, suggesting a bullish sentiment. The MACD values portrayed a slender potential for upward momentum with a value of 0.0012, just slightly above its signal line which was at 0.0011.
The 50-day EMA was at 1.3630, hinting at a short-term bullish trend. Notably, the USD/CAD achieved a 61.8% Fibonacci retracement at 1.3700, and the 50 EMA’s crossover above the blue line advocated for buying. Summarily, the sentiment remains bullish for USD/CAD above 1.36208.
USD/JPY
USD/JPY 4h Chart
On October 13, the 4-hour chart of USD/JPY showcased a marginal bearish stance, settling at 149.640, marking a decline of approximately 0.11%. The technical landscape highlighted a pivot point at 148.93. On the upper side, resistances were identified at 150.54, followed by 151.77, and then at 153.36.
Conversely, the immediate support level was marked at 147.72, trailing down to 146.11 and further to 144.88. The RSI was recorded at 59, an indicator leaning towards bullish momentum. The MACD stood at 0.0690, showing a possible upward momentum below its signal line, which was noted at 0.2060.
Moreover, the 50-day EMA was positioned at 149.10, emphasizing a short-term bullish trend. Given the technical indicators, the USD/JPY trend remains bullish, especially if it sustains above 149.30. In the short term, it may test the resistance at higher levels.
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This article was originally posted on FX Empire
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