EUR/USD Eyes a 2-Year High On Weaker US Consumer Confidence

Talking Points:

• University of Michigan confidence falls to a 4-month low
• Fed’s Yellen says only a change in economic outlook could slow the taper pace
• USD falls against EUR following the release

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US Consumer Confidence fell to a four-month low in March according to the University of Michigan survey. The survey is made up of an index of current economic conditions and the economic outlook.

US economic data has played an important role for dollar traders since Fed Chair Yellen said in February that only a notable change in the economic outlook could prompt a slowdown of the taper pace. Last week, the change in US Non-Farm Payrolls beat expectations for February, signaling that the jobs recovery continued despite weather conditions. Therefore, worse than expected consumer confidence hurts the outlook for a continued recovery.

EUR/USD 1-Minute: March 14, 2014

That’s why the US Dollar continued to post losses against the Euro in the minutes following the release, and EUR/USD returned in the direction of the 2-year high set yesterday at 1.3966. But those looking for further gains should keep in mind that Currency Analyst David de Ferranti warns that a bearish reversal candle was signaled in EUR/USD.

Chart created by Benjamin Spier using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to [email protected] .