When are US monthly retail sales figures and how could they affect EURUSD?

US Monthly Retail Sales Overview

Friday's US economic docket highlights the release of monthly Retail Sales figures for June, scheduled later during the early North American session at 12:30 GMT. The headline sales are estimated to grow by a seasonally adjusted 0.8% during the reported month as against the 0.3% fall recorded in May. Excluding autos, core retail sales probably climbed by 0.6% in June, up slightly from the 0.5% increase in the previous month.

Analysts at TD Securities, however, were slightly less optimistic about the report and explained: “We look for retail sales to recover in June (0.5%), following the series' first contraction this year in May. Spending was likely aided by another firm showing in gasoline station sales and a rebound in the auto segment. We also look for another gain in the eating/drinking segment as consumers continue to transition away from goods. That said, control group sales likely fell again (-0.5%).”

How Could it Affect EURUSD?

Fed Governor Christopher Waller said on Thursday that his decision to back the case for an aggressive rate hike at the upcoming FOMC meeting later this month depends on incoming data. Wallerspecifically cited retail sales and housing as two key metrics. Hence, a stronger-than-expected reading would lift bets for a supersized 100 bps Fed rate hike move on July 27 and boost the US dollar. Conversely, any disappointment would further add to worries about a possible recession, which should continue to weigh on investors' sentiment and benefit the greenback's safe-haven status.

Furthermore, investors remain concerned that a halt to gas flows from Russia could trigger an economic crisis in the Eurozone. This would curtail the European Central Bank’s ability to raise rates and act as a headwind for the shared currency. The fundamental backdrop suggests that the path of least resistance for the EURUSD pair is to the downside. Hence, any attempted recovery move might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Eren Sengezer, Editor at FXStreet, offered a brief technical outlook and wrote: “EUR/USD is moving sideways on the outside of the descending regression channel coming from late June. The Relative Strength Index (RSI) indicator on the four-hour chart, however, stays well below 50, suggesting that buyers remain on the sidelines.”

Eren also outlined important technical levels to trade the EUR/USD pair: “On the upside, 1.0050 (20-period SMA) aligns as immediate resistance ahead of 1.0080 (static level), 1.0100 (psychological level) and 1.0120 (50-period SMA). In case the pair returns within the descending channel below parity, it could target 0.9950 (static level, July 14 low) and 0.9900 (psychological level).”

Key Notes

 •  US June Retail Sales Preview: Has the consumer turning point arrived?

 •  US Retail Sales Preview: Forecasts from six major banks, slowing in core spending

 •  EUR/USD Forecast: Euro remains vulnerable despite reclaiming parity

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).