13 May 2015
Forex News: Will US retail sales improve USD sentiment? – KBC
FXStreet (Barcelona) - Expecting US retail sales to see a slightly stronger than consensus outcome, the KBC Bank Research Team maintains a sell-on upticks bias on EUR/USD, expecting a slight rebound of the dollar in the forex space.
Key Quotes
“In the US, retail sales are forecast to have risen for a second straight month in April (0.2% M/M), although the pace is expected to have slowed from March (0.9% M/M). The underlying picture should be somewhat stronger with the control group expected to show a 0.5% M/M gain. Both auto and gasoline station sales are expected to have dropped in April. We believe that the risks might be for a slightly stronger outcome as we expect to see a further rebound following the poor start of the year.”
“Labour market data have been strong in the US, but real activity has lagged in Q1 (negative GDP reading likely upon revision). So, the market absolutely would like to see stronger hard data like the retail sales.”
“If these remain lacklustre, labour market conditions may deteriorate and the expectations of a lift-off this year may fade still further. That would hurt the dollar and may even threaten a break of EUR/USD above 1.1398, which would be technical very relevant.”
“However, we expect a revival of the US economy and even in case of a disappointment the EUR/USD 1.1398 resistance may hold.”
“So, the US retail sales are key for trading today. We maintain a cautious sell-on-upticks bias for EUR/USD.”
Key Quotes
“In the US, retail sales are forecast to have risen for a second straight month in April (0.2% M/M), although the pace is expected to have slowed from March (0.9% M/M). The underlying picture should be somewhat stronger with the control group expected to show a 0.5% M/M gain. Both auto and gasoline station sales are expected to have dropped in April. We believe that the risks might be for a slightly stronger outcome as we expect to see a further rebound following the poor start of the year.”
“Labour market data have been strong in the US, but real activity has lagged in Q1 (negative GDP reading likely upon revision). So, the market absolutely would like to see stronger hard data like the retail sales.”
“If these remain lacklustre, labour market conditions may deteriorate and the expectations of a lift-off this year may fade still further. That would hurt the dollar and may even threaten a break of EUR/USD above 1.1398, which would be technical very relevant.”
“However, we expect a revival of the US economy and even in case of a disappointment the EUR/USD 1.1398 resistance may hold.”
“So, the US retail sales are key for trading today. We maintain a cautious sell-on-upticks bias for EUR/USD.”