EURUSD moves higher. Goldilocks Univ of Michigan sentiment, and inflation data.

The University of Michigan consumer sentiment showed a sharp increase to 69.4 from 61.3 last month. The estimate was for 62.0. However, what the forex market is reacting to is the lower inflation expectations. The one-year inflation measure decreased to 3.1% from 4.5% last month. The five-year inflation measure moved to 2.8% from 3.2%.

The EURUSD has moved back up to test its 100-day moving average and 50% midpoint of the November trading range at 1.0763 and 1.0766 respectively.A move above that level would disappoint the sellers off of the stronger US jobs report. There is nothing better than stronger growth and lower inflation as well.

On topside on more upside momentum, the 1.0781 level is the next target fall by the following 100-hour moving average 1.07955. Recall from yesterday the high price moved up to test that falling 100-hour moving average only to find willing sellers. The hurdle today is lower at 1.07955. Getting above it, however, would increase the bullish bias from a technical perspective.

Conversely staying the 100-day moving average and 50% retracement would keep the sellers more in control at least in the short term. Support target at 1.0725.

US stocks are now higher:

  • Dow Industrial Average is up 113 points or 0.31% at 36229.80
  • S&P index is now up 19 points or 0.42% of 4605
  • Nasdaq index is up 70 points or 0.49% at 14410.07

The broader indices are now positive on the week:

  • S&P index is up 0.20%
  • Nasdaq index is up 0.72%

The Dow Industrial Average is still down but only by -0.05%. At stake? The five-week winning streaks for the major indices.

US yields are higher but off their highest levels and still down sharply from recent high levels (they really can’t go much lower). For the week the shorter and is higher while the 30-year yield is actually still lower for the week:

  • 2-year yield 4.689% up 11.2 basis points. For the week the yield is up 14.9 basis points. The 2-year yield peaked at 5.259% in October. That is still down 57 basis points from its high yield.
  • 5-year yield 4.228% up 11.5 basis points. For the week the yield is up 10.0 basis points. The yield peaked at 5.0%. That is a down 79 basis points from its high.
  • 10-year yield 4.223% +9.5 basis points. For the week, the yield is up 2.7 basis points. The yield peaked at 5.021%. That is down 80 basis points from its high.
  • 30-year yield 4.312% +6.7 basis points. For the week the other down -7.6 basis points. The yield peaked at 5.178%. That is down 86 basis points from its high.

This article was written by Greg Michalowski at Source