U.S. retail sales are expected to have declined in September by 0.7% after a 0.3% drop the month prior. August saw a precipitous drop in gasoline receipts as consumers cut back on consumption due to elevated prices.
Fundamental Outlook U.S. retail sales are expected to have declined in September by 0.7% after a 0.3% drop the month prior. August saw a precipitous drop in gasoline receipts as consumers cut back on consumption due to elevated prices. September should see a continuation of this trend as gasoline prices start to ease on the back of falling oil prices. Americans are also expected to continue curbing their spending as they battled elevated inflation levels, declining home values and tight credit markets. Therefore, a bigger than expected drop could be in store, which would validate the bullish technical outlook for the EURUSD. Any decline in consumer spending will stoke recession fears and provide bullish Euro sentiment. Technical Outlook
The beginning of a larger move is usually ugly and unclear. Such is the case here with the EURUSD. Still, wave rules have not been broken in the count presented above and there is no change to this morning’s technical’s when I wrote that “I am treating the advance from 1.3257 as a series of 1st and 2nd waves. This count is valid as long as price is above 1.3485.” 1.3546 (78.6%) may provide support. Euro traders may wish to take a look at Euro crosses for long term trades. For More Technical Analysis Visit the Daily Technical Report To discuss this report contact John Rivera, Currency Analyst: jrivera@fxcm.com