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Recent reports show slowdown and downturns on economic indicators, but they did not affect in any way the position and rate of the US dollar in the market. Instead, the bears would need to seek a return to below the support level of 1.1785, before the quote will decline to the level of 1.1710. However, the bearish trend could end abruptly if the quote decreased largely to the support level of 1.1650, as an upward move will begin there, with which if the bulls manage to withstand the pressure from the bears, the quote may reach price highs at 1.1890 and 1.1960, after a breakout from the resistance level of 1.1840.
Going back to economic indicators, the recently published consumer confidence in the US indicated the persistent fear of Americans on the negative impact of the coronavirus, as a result of which the index remained falling for two months already. The Conference Board reported that the index was down again to 84.8 points in August, contrasting the increase to 92.5 points that economists had expected. The index of current conditions, which reflects the current state of the Americans, sank especially strongly, with the indicator falling to 84.2 points, against 95.9 points in the previous month. In addition, expectations regarding short-term prospects also decreased from 88.9 points to 85.2 points this August, highlighting the worsening conditions for business and employment, which puts bulk pressure on US sentiment.
Data on the construction sector did not lead to changes in the market either, even though the indicator has been rising for four months already. Growth was mainly driven by very low mortgage rates, as well as due to deferred demand, and the recent report showed that primary home sales jumped 13.9% in July, accounting to 901,000 homes per year. Economists had forecast only a 1.4% growth or about 787,000 homes a year.
As for house prices, the rate in June remained unchanged due to the recovery in sales after the removal of a number of restrictions. Thus, the national house price index rose 4.3% compared to the same period last year. Most likely, due to the sharp demand for houses and their shortage, which is now observed in the United States, prices will continue to creep up at the end of summer, while closer to the beginning of winter, the situation will begin to smooth out , and growth will slow down significantly after meeting demand.
Meanwhile, business activity in the Richmond Fed was also published, but it did not affect as well the rate of the dollar in the market. Nonetheless, the area reported an 18-point increase on composite manufacturing PMI, so much better than the expected 7-point drop that economists were expecting.
Retail sales also rose, according to the report of the Retail Economist and Goldman Sachs, as the data increased 1.6% over the week of August 16-22. Redbook, meanwhile, said retail sales jumped 4.1% in the first 3 weeks of August.
In any case, the market did not react to the recent macroeconomic reports no matter how good or bad they are, but the pause, which traders have now taken at the end of the summer, may lead to another strengthening in the US dollar, especially since the problems associated with the deteriorating EU economy are becoming much worse than what the US is experiencing.
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