Last Friday, the US consumer confidence data was released what was evident was that consumer confident was at an all time high. Last month’s consumer confidence rose to 98.0 from a consensus value of 94.3 and Americans in general were confident of the economy and in particularly the policy proposals promised by the Trump administration. Usually, readings like this tend to spur spending which in return boost inflation. According to this survey also and contrary to reports, Inflation is expected to slow down in 2017 through to 2018 from last year’s forecast of 2.4% to 2.3% in the coming year with price growth in the next 5-10 years to rise to 2.5% down from 2.6% forecasted earlier on.
To the daily chart and there is expectations of price reversals towards the 0.69 price tag in the coming few days. The daily chart stochastics is clearly oversold and Friday’s candlestick closed as a strong bearish candlestick. If a Fibonacci retracement is drawn from November’s high low, then there is a confluence happening at the 50% level. Wednesday’s, Thursday’s and Friday’s candlestick formed a 3 bar reversal pattern resulting in an evening star. The doji Thursday candlestick had a long upper wick and the selling pressure was manifested in Friday’s candlestick bear engulfing candlestick with an overbought stochastic s. If price is to trend lower, then the 0.71 level will be our first zone of support with the second major support being the support trend line visible in the weekly chart-it hasn’t been broken since the uptrend began a year ago. Caution should be practiced because there is mixed signals-the weekly stochastics is oversold, the daily chart overbought and the monthly chart overbought but as always, I look at the monthly chart trends and enter in the daily chart and therefore my skew is to sell in the daily chart since there is an overbought stochs and a sell signal printed.
Since there are no major fundamentals today, trade as follows with entry in the 1 hour chart:
Sell stop: 0.7150
Stop Loss: 0.7190
Take Profit: 0.69
Have a good trading day.