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 August, due later during the early North American session at 12:30 GMT. On a monthly basis, the headline sales are estimated to remain flat for the second straight month. Excluding autos, core retail sales probably rose a modest 0.1% during the reported month, down from 0.4% growth in July.

Analysts at Deutsche Bank sounded more optimistic and offered a brief preview of the report: “We expect a +0.6% MoM reading, up from last month's flat print. As gasoline prices continue their downward trend, whether this assuages the inflationary pressures on consumer spending will be important.”

How Could it Affect EUR/USD?

Ahead of the key release, expectations for a more aggressive policy tightening by the Fed continue to act as a tailwind for the US dollar. A surprisingly stronger data will lift bets for a full 100 bps at next week's FOMC meeting and provide an additional lift to the USD. Conversely, any disappointment is unlikely to dent the underlying bullish sentiment surrounding the buck, suggesting that the path of least resistance for the EUR/USD pair is to the downside.

Eren Sengezer, Editor at FXStreet, outlines important technical levels to trade the EUR/USD pair: “The Fibonacci 61.8% retracement of the latest uptrend forms key resistance at 1.0000. The 50 and the 100-period SMAs on the four-hour chart reinforce that level as well. In case EUR/USD manages to flip that level into support, it could target the 1.0030/40 area (Fibonacci 50% retracement, 20-period SMA) and the 1.0070/80 area (Fibonacci 38.2% retracement, 200-period SMA).”

“On the downside, sellers could take action with a drop below 0.9950 (static level) and cause EUR/USD to decline toward 0.9900 (psychological level) and 0.9865 (September 6 low),” Eren adds further.

Key Notes

 •  US Retail Sales Preview: Can consumers keep up with inflation? A breather could weigh on the dollar

 •  US Retail Sales Preview: Forecasts from six major banks, can the US consumer remain strong?

 •  EUR/USD Forecast: Euro defines range before next breakout

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).