American consumers were more pessimistic about the path of the economy in October, according to latest survey results published on Tuesday. The Conference Board's Consumer Confidence Index dropped unexpectedly to 98.6 points in October, following the prior month's 104.1, the best level since 2007, while market analysts anticipated a milder decrease to 101.5 during the reported period. The Present Situation Index fell to 120.6 from 127.9 in the tenth month of the year, while the Expectations Index dropped to 83.9 from 87.2 registered last month. Furthermore, the share of respondents expecting more jobs in the upcoming months declined to 13.1% from September's 15.7%, whereas the percentage of those expecting incomes to rise remained unchanged at 17.5% in October. Nevertheless, the share of respondents expecting fewer jobs fell to 17.0% from 18.1% seen in September, as well the percentage of those expecting incomes to drop to 9.8% from the previous month's 10.4%.
After the release, the US Dollar dropped slightly against the Euro, trading at 1.0860, whereas the US Dollar Index, which measures the Greenback against a basket of six major rivals, declined to 98.98.
US Markit Services PMI and New Home Sales
Wednesday is the last day with less impactful data this week. Today one of the most important events is the US Markit Services PMI. It captures business conditions in the services sector. As the services sector dominates a large part of total GDP, the services PMI is an important indicator of the overall economic condition in the US. Another event will be the US New Home Sales, which are an important measure of housing market conditions. House buyers spend money on furnishing and financing their homes, so as a result the demand for goods, services and the employees is stimulated. Ahead of tomorrow's Durable and Core Durable Goods Orders, the above-mentioned events are likely to be the only USD/JPY pair's drivers today.USD/JPY to preserve the consolidation trend
Due its poor performance on Tuesday, the USD/JPY pair managed to preserve its consolidation trend. Since the upper border of the trend was reached, the Buck is expected to weaken against the Japanese Yen today. The closest area to limit the losses is located around 103.75, formed by the weekly pivot point and the monthly R1. A drop lower is unlikely, as there are no significant market movers present today and technical indicators keep giving bullish signals. However, a return under the 104.00 mark is quite possible, unless bulls decide to push the Greenback higher ahead of tomorrow's Durable Goods Orders data.Daily chart
Bullish traders' sentiment keeps fading, being that only 56% of all open positions are long (previously 57%). Meanwhile, the number of purchase orders added 6% points, having risen to 59%.
Meanwhile, there has been an increase in the number of long positions at other brokers. Right now 55% of OANDA clients are bulls, compared to 54% on Tuesday. Saxo Bank clients, however, are slightly less bullish than on Tuesday, being that the portion of longs now takes up 56% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar