Forex: Consumer sentiment jumps; Dollar is waking up

The Greenback seems to be back after the good Reuters/Michigan Consumer sentiment data and profit taking following a bearish Dollar week. EUR/USD has fallen 85 pips from new 2009 high at 1.4633 to trade below 1.4600 level and post 1.4550 as fresh intra-day low.

Preliminary Reuters/Michigan Consumer Sentiment Index has risen 4.5 pts from 65.7 in August to post 70.2 in September. On the other hand, Wholesale inventories has declined 1.4% in July, less than 1.7% drop posted in Jun.

Currently the pair is trading 1.4570/80, easing all of the previous gains.

The current week, EUR/USD is rising 2.00% from Monday opening price action at 1.4306, and most traders could be focusing on taking profits after the last bearish Dollar momentum.

Kathy Lien, Director of Currency Research for GFT, comments: “The U.S. dollar has strengthened against all of the major currencies on the heels of the consumer confidence report. The momentum in the EUR/USD is fading rapidly and the chance for a deeper pullback is high. However as long as the EUR/USD holds above 1.44, the uptrend remains intact.”