US DOLLAR INDEX RETREATS AHEAD OF CONSUMER CONFIDENCE DATA

The EURUSD price moved sideways on Tuesday morning as investors waited for the upcoming US consumer confidence data and Federal Reserve interest rate decision. Economists expect data by the Conference Board to show that the country’s consumer confidence continued falling as they remained concerned about the rising cost of living. They see the headline consumer confidence falling from 98.7 to 97.2. The US will also publish the latest house price index on Tuesday as the Federal Open Market Committee (FOMC) started its monthly meeting. Analysts expect that the bank will hike interest rates by 0.75% on Wednesday.

The Japanese yen retreated slightly on Tuesday morning after the Bank of Japan (BoJ) published minutes of the latest meeting. In its meeting, officials warned that the country’s economy was still suffering as the crisis in Ukraine continued. As a result, the bank decided to leave interest rates unchanged at – 0.10% and signaled that it will not raise rates in the near term even as inflation remains at the highest level in more than a decade. Other major central banks like the Fed, Bank of England (BoE), and European Central Bank (ECB) have started hiking rates to counter this inflation.

American stocks retreated as investors continued focusing on the ongoing earnings season. On Monday, companies like Newmont Corporation, SquareSpace, and Whirlpool published their results. Most of them warned about the rising cost of doing business as wage growth and commodity prices track higher. The earnings season will continue on Tuesday with companies like Coca-Cola, Fiserv, Ecolab, Corning, 3M, PulteGroup, and Pentair set to publish their results. PulteGroup will be notable since it’s results will provide a feel about the housing market.

NAS100

Nasdaq 100 index declined as investors waited for the upcoming big tech earnings. It dropped to a low of $12,250, which was the lowest level in more than a week. It also managed to move below the 25-day moving average. Notably, the index retested the important support level at $12,250, which was at the highest point on June 27. Therefore, because of this break and retest pattern, the index will likely resume the bullish trend this week.

EURUSD 

The EURUSD pair moved sideways as investors wait for the upcoming economic data from the US and FOMC decision. It moved to a low of 1.0200, which was slightly below last week’s high of 1.0281. The price is at the same point as the 25-day moving average while the ADX index has moved lower. The RSI is slightly below the overbought level. Therefore, the pair will likely have a bullish break-out since it has formed an inverted head and shoulders pattern.

USDCAD 

The USDCAD pair retreated to a low of 1.2855, which was the lowest level since July 6 of this year. The pair has formed a head and shoulders pattern and moved below the 25-day moving average. The Stochastic Oscillator and the Relative Strength Index (RSI) also tilted lower. Therefore, the pair will likely continue falling as sellers target the next key support at 1.2750.