The Conference Board Consumer Confidence Index dropped more than experts estimated. In April, it lost 3.8% and reached 120.3, thus, marking the first decline since January. The fall was mainly attributable to the less optimistic view of business conditions and the labour market in the upcoming six months. As a result, the number of respondents, who evaluated business conditions as "good", decreased from 32.4% to 30.2% and the share of those, who assessed the available number of jobs in the market as "plentiful", plunged from 31.8% to 30.8%.
In addition, the number of people who evaluated business conditions as "bad" increased slightly from 13.1% to 13.8%. Yet, the share of consumers that believed jobs were "hard to get" remained unchanged at 19.1%. The Conference Board's data confirmed the view that in the short-run consumers would likely to limit their spending and put more emphasis on savings accumulation. Tuesday's data also showed that the number of people, who thought that business conditions would worsen over the next six months, rose from 8.5% to 10.9%, while the share of those expecting weaker job creation surged from 12.7% to 13.1%. Nevertheless, the majority of respondents still believed that the economy would continue growing in the months ahead.
No significant events until Thursday
GBP/USD to bounce back from 1.2850
On Tuesday, the Cable behaved in accordance with expectations, having appreciating, but with the 1.2850 psychological level limiting the intraday gains. Consequently, since the pair reached its consolidation trend's upper border, a bearish development is now likely to prevail. The 1.2750 mark is the intraday bottom floor, but the exchange rate could also struggle moving below 1.2780. However, technical indicators are unable to confirm the possibility of the negative, as they keep giving bullish signals in the daily timeframe. As a result, we should not rule out the chance of the Pound breaking the 1.2850 handle and reclaiming the 1.29 mark, although this scenario is highly unlikely.
Daily chart
Hourly chart
Traders are equally divided
Traders remain relatively neutral, with 51% of all open positions being long and the other 49% being short the Sterling against the US Dollar. At the same time, the share of purchase orders inched down from 60 to 57%.
A less optimistic situation is observed elsewhere. The sentiment at OANDA remains bearish, namely 58% of all open positions are short and the remaining 42% are long. Meanwhile, sentiment at Saxo Bank worsened again over the day, with 53% of traders now being short and the other 47% being long the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders still indecisive
By the end of the next three months traders believe the Cable is to rise above the 1.26 major level, as 58% of survey participants believe so. While the current price is around 1.28, the average forecast for July 26 is 1.2689. The 1.30-1.32 range is now the most popular price interval, having 18% of the votes, while on the second place is the 1.28-1.30 one, with 15% of poll participants choosing it. Furthermore, the 1.18-1.20 and the 1.34-1.36 intervals were each selected by 11% of the voters.