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Fundamental Forex Analysis

When are US monthly retail sales figures and how could they affect EUR/USD?

US monthly retail sales overview

Friday’s US economic docket highlights the release of monthly retail sales figures, scheduled at 13:30 GMT. Consensus estimates point to modest growth of 0.3% for January, matching previous month’s reading. Sales excluding automobiles (core retail sales) are also seen rising by 0.3% during the reported month as against a stronger-than-expected 0.7% growth recorded in December. Meanwhile, the closely watched Retail Sales Control Group is expected to rise by 0.3%, lower than a 0.5% increase in the previous month.

As Joseph Trevisani, NDDFX’s own Senior Analyst explains: “Consumption over the past year, aside from the anomalous reading of -2% in December 2019 and 1.4% in January 2019 that were due to reporting problems around the government shutdown in January, has been stable. Despite all the political wrangling and bitterness in DC, the US-China trade dispute, the recession in manufacturing and assorted international and now health crises, US consumers has stayed close to their happy employment roots.”

How could it affect EUR/USD?

Any positive surprise might be enough to provide an additional boost to the already stronger US dollar. Meanwhile, the market reaction to a disappointing reading might be limited and seems unlikely to hinder the EUR/USD pair’s well-established bearish trend.

Meanwhile, NDDFX’s Yohay Elam outlined important technical levels to watch: “EUR/USD has hit a low of 1.0827, just above the “Macron Gap” level of 1.0820, which was seen after the now President of France, Emmanuel Macron, won the first round of the elections in April 2017. On the other side of that Sunday gap from nearly three years ago, we find 1.0770 and 1.0720 as potential support lines.”

“Looking up, resistance is at Thursday’s temporary support line at 1.0865, followed by the 2019 trough of 1.0879. Next, 1.0905, 1.0940, and 1.0965 played a role on the way down and may also cap it on the way up,” Yohay added further.

Key Notes

US Retail Sales January Preview: Jobs and consumption are the core of the US economy

EUR/USD Forecast: No love on Valentine’s Day as Germany halts, US consumer, gap line eyed

EUR/USD Price Analysis: The focus shifted to the 1.0814 level

About US retail sales

The Retail Sales released by the US Census Bureau measures the total receipts of retail stores. Monthly per cent changes reflect the rate of changes in such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).

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