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

US Monthly Retail Sales Overview

Tuesday's US economic docket highlights the release of monthly retail sales figures for October, scheduled later during the early North American session at 13:30 GMT. The headline sales are forecast to rise 1.2% during the reported month as against 0.7% growth recorded in September. Excluding autos, core retail sales probably climbed by 1% in October.

Meanwhile, analysts at ING sounded more optimistic and offered their view on the upcoming release: “Retail sales will be lifted by 1.5% MoM thanks to the 6% MoM increase in new vehicle units sold – the first increase since April – while gasoline station sales will be boosted by the surge in gasoline prices. Elsewhere, rising household income and wealth should mean decent gains although we continue to expect a rebalancing trend away from the purchase of physical things that show up in retail sales, towards services, which are picked up in broader consumer spending.”

How Could it Affect EUR/USD?

Ahead of the key consumer spending data, the US dollar continued drawing support from the prospects for an early policy tightening by the Fed and dragged the EUR/USD pair to fresh 16-month tops. A stronger print will reaffirm hawkish Fed expectations and further fuel the USD bullish run.

Conversely, a softer reading will validate weaker consumer sentiment and force investors to scale back their bets for an eventual Fed rate hike move by July 2022. This would be enough to prompt some USD profit-taking and trigger an aggressive short-covering around the EUR/USD pair.

Meanwhile, Eren Sengezer, Editor at FXStreet, offered a brief technical outlook for the EUR/USD pair: “On the four-hour chart, the Relative Strength Index (RSI) indicator is holding below 30, showing oversold conditions. However, we have seen EUR/USD struggling to gain traction when the RSI fell below 30 last week and the upcoming technical correction might not be significant enough to attract buyers.”

Eren also provided some important technical levels to trade the major: “On the downside, initial support aligns at 1.1360 (static level). A daily close below that level could open the door for additional losses toward 1.1300 (psychological level). In the meantime, EUR/USD continues to trade in a one-week-old descending regression channel and the upper limit of that channel at 1.1400 forms the first technical resistance ahead of 1.1440 (static level) and 1.1470 (static level).”

Key Notes

 •  US Retail Sales October Preview: Inflation Is the key, not consumption

 •  US Retail Sales Preview: Forecasts from six major banks, hot gains for retailers

 •  EUR/USD Forecast: Euro's recovery attempts to remain short-lived

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).