When are US monthly Retail Sales figures and how could they affect EUR/USD?
US Monthly Retail Sales Overview
Wednesday's US economic docket highlights the release of monthly Retail Sales figures for February, due later during the early North American session at 12:30 GMT. The headline sales are expected to decline by 0.3% during the reported month, partly reversing a strong 3% increase recorded in January. Excluding autos, core retail sales probably fell by a modest 0.1% in February, as compared to the 2.3% rise in the previous month.
Analysts at NBF offer a brief preview of the report and write: “Car dealers likely contributed negatively to the headline number, as auto sales fell during the month. Gasoline station receipts, meanwhile, could have stayed more or less unchanged judging by the stagnation in pump prices. All told, headline sales could have contracted 0.7%, erasing only a fraction of January’s gain. Spending on items other than vehicles could have fared a little better, retreating just 0.5%.”
How Could it Affect EUR/USD?
Ahead of the key release, reviving bets for at least a 25 bps Fed rate hike at the March policy meeting act as a tailwind for the US Dollar. A stronger US macro data will reaffirm hawkish Fed expectations and provide an additional boost to the buck. Conversely, any disappointment is more likely to be offset by a fresh wave of the global risk-aversion trade, led by worries that Credit Suisse will indeed default, which should continue to benefit the Greenback's safe-haven status. This, in turn, suggests that the path of least resistance for the EUR/USD pair is to the downside. Traders, however, might refrain from placing fresh bearish bets heading into the crucial European Central Bank (ECB) meeting on Thursday.
Meanwhile, Eren Sengezer, Editor at FXStreet, offers a brief technical outlook and outlines important technical levels: “EUR/USD's action on Tuesday confirmed that static resistance area have formed at 1.0750/60. A four-hour close above that hurdle could open the door for a leg higher toward 1.0800 (psychological level, static level) and 1.0850 (static level from January).”
“On the downside, 1.0700 (static level, psychological level, 200-period Simple Moving Average (SMA) on the four-hour chart) aligns as key support. If that level fails, sellers could show interest and drag EUR/USD down to 1.0640 (50-period SMA) and 1.0620 (100-period SMA),” Eren adds further.
Key Notes
• US Retail Sales Forecast: Correction following January surge – Previews by eight banks
• EUR/USD Forecast: Euro likely to hold its ground ahead of ECB
• EUR/USD nose-dives to 3-day lows and threatens 1.0600
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).