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US retail sales overview

The US economic docket at the start of a new trading week highlights the release of monthly retail sales figures, scheduled at 1230 GMT. Consensus estimates point to a 0.5% m/m rise in June as compared to a 0.8% growth reported in the previous month. Meanwhile, core retail sales, which exclude automobiles, are projected to have expanded by 0.4% on a monthly basis, following a 0.9% increase in May.  

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

A disappointing reading might further fuel concerns that escalating US-China trade tensions is influencing consumer sentiment and impact negatively on the USD, albeit firming Fed rate hike expectations might continue to limit any sharp downfall.

Focusing on the key US Dollar Index, a breach of the 94.45 immediate support (10-day SMA) is likely to open the room for a test of 94.00 handle ahead of 93.70 support area (July 9 swing low).  

Conversely, a stronger than expected print should provide a minor boost to the greenback and lift the index back towards the key 95.00 psychological mark. A follow-through up-move is likely to confront resistance near the 95.25 region ahead of YTD high level of 95.53 touched on June 28.

Key Notes

   “¢    Key events ahead for Monday: US June retail sales are up – Westpac

   “¢    US Retail Sales preview: is all about the trade war these days

   “¢    US Dollar finds some support near 94.60 ahead of key data

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).