When is the US retail sales data and how could it affect DXY?

US retail sales overview

The US Census Bureau will release monthly retail sales figures for May at 1230 GMT on Thursday and consensus estimates point to a 0.4% m-o-m increase in retail sales as compared to 0.2% reported in April.  Meanwhile, the measure of sales that excludes automobiles – core retail sales – is projected to expand by 0.5% on a monthly basis, following a 0.3% rise in April.

How could it affect the US Dollar index (DXY)?

Robust numbers are also likely to add credence to the FOMC forecast for four rate increases in total for 2018 and should boost the greenback. Focusing on the key US Dollar Index, any meaningful rise is likely to confront resistance near the 94.00 handle and is followed by 94.32 (high Jun.4). The 94.45 region (May 31 high) lies not far above and might act as an additional barrier any further bullish movement.

Conversely, weaker-than-projected numbers could trigger fresh USD selling and push the index to 93.22 (June 7 low). A follow-through weakness would aim for steeper losses to 92.80 (38.2% Fibonacci retracement level of the April-June up move) and then 92.24 (low May 13).

Key Notes

   •  Key US retail sales preview - Nomura

   •  US Retail Sales Preview: A tie-breaker after the Fed, but not for EUR/USD

About US retail sales

The Retail Sales released by the US Census Bureau measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of 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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