Summary:

• CB Consumer confidence 128.7 vs 126.0 exp and 127.7
• New homes sales smash forecasts (694k vs 630k exp)
• USD pulling back after strong recent gains

The standout economic releases of the afternoon have come from the US with both the latest consumer confidence and housing figures beating forecasts. Looking first at the conference board reading, this metric increased to 128.7 from 127.7 for the month of April, and considering that the consensus forecast was for a decline to 126.0 then it is clearly a strong print.   

The overall trend for US consumer confidence is clearly positive with a sustained move higher readily apparent throughout this decade. In light of this today’s number may not seem too important but compared to the recent pullback in the more widely viewed UoM equivalent it does go some way to allay fears that a larger pullback lies around the corner.  

 The latest conference board reading came in better than expected and extends the uptrend seen in this indicator for several years now. Source: XTB Macrobond 

 The US dollar has been on a nice run higher of late but today is fairly mixed across the board. Emerging market currencies are the biggest movers against the buck with the MXN and TRY making good gains whilst BRL is experiencing some notable selling. 

 The USD is fairly mixed on the day against most of the majors with emerging markets experiencing the largest moves. Source: xStation

One USD cross that has been seeing large moves lately is the USDCAD, with the pair rising strongly last week and during Monday’s session. The market has now moved back near a prior resistance zone around 1.2830-1.2930. 

 USDCAD is back at a potentially key swing level on D1. Source: xStation

ON a H1 chart the market has run into some resistance around 1.2860 and fib retracements could now provide possible targets for shorts or potential support levels that longs may look to enter. The 23.6% at 1.2781 is the first area of interest from a fib perspective with the 61.8% at 1.2654 another that may draw attention as this was wear the move higher really took off from. Also note the 8 and 21 EMAs are converging and could be close to printing a bearish cross. As for resistance the recent high at 1.2860 is a pretty obvious place to start with a break above there negating the fib layout shown below.  

 Fib retracements could offer potential levels of interest if USDCAD does pullback with the 23.6% at 1.2781 and the 61.8% at 1.2654 should there be a deeper correction. Source: xStation