US monthly retail sales overview
Wednesday's US economic docket highlights the release of monthly retail sales figures for August, scheduled later during the early North American session at 12:30 GMT. The headline sales are anticipated to have increased by 1% during the reported month as against the 1.2% rise recorded in July. Sales excluding autos are projected to climb 0.9% in August as against the previous month's growth of 1.9%. Meanwhile, the closely watched Retail Sales Control Group are anticipated to have risen by 0.5% following July's gain of 1.4%.
As Joseph Trevisani, Senior Analyst at FXStreet explains: “The major categories of retail sales have had an excellent five months, the best in over 10 years. Despite March and April when sales collapsed by the largest amount on record as the economy was shut by government fiat, the recovery in May June and July was so energetic that the average for the whole period is one of the highest in history.”
How could it affect EUR/USD?
Barring any major divergence from the expected figures, the data is unlikely to provide any meaningful impetus as the focus remains on the highly anticipated FOMC monetary policy decision. That said, a weaker reading might be enough to continue exerting some pressure on the US dollar and assist the EUR/USD pair to gain some traction. Bulls, however, might still wait for some strong follow-through buying beyond the 1.1900 mark before positioning for any meaningful move up.
Meanwhile, Yohay Elam, FXStreet's own analyst, provided some important technical levels to trade the EUR/USD pair: “Some resistance awaits at 1.1860, which provided support in recent days. It is followed by 1.19, which capped EUR/USD on Tuesday. Further above, 1.1920 was a swing high and 1.1965 is the next level to watch. Support awaits at 1.1830, the daily low, followed by 1.1785, which was a trough early in the month. The next levels to watch are 1.1755, and 1.17, both double bottoms.”
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).
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