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

US monthly retail sales overview

Thursday's US economic docket highlights the release of monthly retail sales figures for March, scheduled later during the early North American session at 12:30 GMT. The headline sales probably surged by 5.9% during the reported month, more than reversing a bad weather-induced decline of 3% in February.

Sales excluding autos are also projected to increase by 5% in March. Meanwhile, the closely watched Retail Sales Control Group are anticipated to rise by 6.3% as compared to the 3.5% drop recorded in the previous month.

As FXStreet Editor, Eren Sengezer explains: “In addition to the improving weather conditions, the disbursement of stimulus payments is also seen as a factor that could ramp up sales figures. Investors will pay close attention to the Retail Sales Control Group to assess the potential impact on inflation.”

How could it affect EUR/USD?

Ahead of the key macro data, the US dollar staged a modest bounce from four-month lows and exerted some downward pressure on the EUR/USD pair. Investors have started looking through the headline-grabbing numbers as transitory and seem convinced that the Fed will keep interest rates low for a longer period. This, in turn, suggests that slightly better-than-expected figures might do little to impress the USD bulls. That said, a big beat on the expected numbers might force investors to lighten their bearish USD bets and set the stage for some meaningful downside for the EUR/USD pair.

Meanwhile, Yohay Elam, FXStreet's own analyst offered a brief technical outlook for the EUR/USD pair: “The four-hour chart is showing that EUR/USD is in an uptrend since late March, but it faces issues at the triple-top of 1.1990. The Relative Strength Index is at around 70 – flirting with overbought conditions. That hints a downside correction is coming.”

Yohay also provided some important technical levels to trade the major: “Euro/dollar has support at 1.1950, a swing high from March, followed by 1.1925 and 1.1860, which defined the currency pair's trading range earlier in April. Above the critical cap of 1.1990, the next resistance lines are 1.2025, 1.2060 and 1.2105.”

Key Notes

 •  US March Retail Sales Preview: Can a strong rebound ramp up inflation expectations?

 •  EUR/USD Forecast: Break or bounce at the triple-top? Three factors point to the downside

 •  EUR/USD to focus on the 1.2243 March high once above 1.1990/1.2014 – Commerzbank

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).