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 July, due later during the early North American session at 12:30 GMT. The headline sales are estimated to register a modest 0.1% growth during the reported month, down sharply from the 1% increase in June. Excluding autos, core retail sales probably shrunk by 0.1% in July against the 1% rise in the previous month.

Analysts at ING offer a brief preview of the report and explain: “Retail sales at the headline level will be modestly depressed (0.3%) due to falling gasoline prices weighing on gas station sales as it is a nominal dollar figure. However, this frees up cash to spend on other goods and services so the ‘core’ rate of retail sales growth should rebound and help to translate into rising real consumer spending.”

How Could it Affect EUR/USD?

Ahead of the key release, the US dollar stands tall near the monthly peak touched the previous day and continues to draw support from hawkish Fed expectations. A surprisingly stronger consumer spending data would reaffirm speculations that the Fed would stick to its aggressive policy tightening path and lift the greenback. Conversely, a weaker-than-expected report could prompt some USD selling and lend support to the EUR/USD pair. That said, any immediate market reaction is more likely to be short-lived ahead of the FOMC meeting minutes, scheduled to be released later during the US session.

Eren Sengezer, Editor at FXStreet, offers a brief technical outlook and writes: “EUR/USD faces strong resistance in the 1.0200/1.020 area, where the 100-period and the 200-period SMAs on the four-hour chart are located. Unless buyers reclaim that level, the bearish bias should stay intact. Meanwhile, the Relative Strength Index (RSI) indicator stays below 50 and the 20-period SMA crossed below the 50-period and 100-period SMAs, supporting the view that sellers look to dominate the pair's action.”

Eren also outlines important technical levels to trade the EUR/USD pair: “On the downside, 1.0150 (static level) aligns as first support. Although the pair dropped below that level on Tuesday, it managed to rise back above it. If this level is confirmed as resistance, additional losses toward 1.0100 (static level, psychological level) and 1.0050 (static level) could be witnessed.”

“Above 1.0200, resistance are located at 1.0230 (Fibonacci 38.2% retracement, 50-period SMA) and 1.0300 (Fibonacci 50% retracement),” Eren adds further.

Key Notes

 •  US Retail Sales Preview: Forecasts from six major banks, losing speed in July

 •  EUR/USD Forecast: Euro could test 1.0100 with key resistances staying intact

 •  EUR/USD: Break below support at 1.01 to open up a move towards parity – ING

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).