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 January, scheduled later during the early North American session at 13:30 GMT. The headline sales are estimated to have risen by a seasonally adjusted 2% during the reported month, reversing the 1.9% fall recorded in December. Excluding autos, core retail sales probably climbed by 0.8% in January as against the previous month's dismal reading of -2.3%.

Analysts at TD Securities (TDS) offered a brief preview and explained: “Spending was likely aided by a surge in auto purchases and an improvement in restaurant sales, with the latter likely recovering from the Omicron impact. We also expect control group sales to gain some ground again following two consecutive declines in Nov-Dec.”

How Could it Affect EUR/USD?

Ahead of the key release, signs of receding Russian-Ukraine tensions undermined the safe-haven US dollar and pushed the EUR/USD pair higher for the second successive day. That said, the prospects for a faster policy tightening by the Fed should help limit the USD losses. A stronger than expected US Retail Sales data might further boost market bets for a 50 bps Fed rate hike move in March and further act as a tailwind for the greenback. Conversely, a softer print is unlikely to derail the Fed's policy normalization path or prompt any meaningful selling around the buck. That said, the immediate market reaction is likely to be short-lived as the focus remains on the FOMC meeting minutes, due for release later during the US session.

Meanwhile, Eren Sengezer, Editor at FXStreet, outlined important technical levels to trade the EUR/USD pair: “1.1400 (psychological level, Fibonacci 23.6% retracement of the latest uptrend, 50-period SMA) aligns as the next bullish target ahead of 1.1450 (static level) and 1.1480 (static level).”

“On the downside, the Fibonacci 38.2% retracement and the 200-period SMA seem to have formed key support in the 1.1340/1.1350 area ahead of 1.1320 (100-period SMA) and 1.1300 (psychological level, Fibonacci 50% retracement),” Eren added further.

Key Notes

 •  US January Retail Sales Preview: Geopolitics, FOMC Minutes to impact dollar’s valuation

 •  US Retail Sales Preview: Forecasts from five major banks, consumer activity regaining steam

 •  EUR/USD Forecast: Euro faces two-way risk, markets await clarity on Russia-Ukraine conflict

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).