Dollar Looks to U.S. Advance Retail Sales to Dictate Price Action
U.S. Advance Retail Sales(13:30 GMT)
Retail sales in the world’s largest economy is expected to rise 0.5 percent in January after climbing 0.6 percent the month prior. Indeed, a reading exceeding economists’ forecasts could add momentum to the dollar’s overnight rally and paint a clearer picture for the U.S. as uncertainty in the region remains. Meanwhile, an increase in January will mark the seventh consecutive advance.
Weather conditions may have dampen retail sales, but as snowstorms impacted households early in January, there was plenty of shopping opportunity for the month. A reading better than predications may suggest that consumer demand and confidence is indeed increasing which is a positive sign for economic activity as consumer spending makes up approximately two-thirds of gross domestic product. As concerns surrounding the economic health in the world’s largest economy remains, U.S. retail sales will likely provide color to the bleak picture and validate the AUDUSD technical bearish outlook.
AUDUSD 30 Minute Chart
Charts Created Using FXCM’s Strategy Trader – Prepared by Michael Wright
AUDUSD: Price action recently broke below its rising 30 minute trend line that remained intact since Friday. As the slow stochastic and MACD indicators flip to the downside, signaling for losses, currency traders should not rule out further declines in the pair. Going forward, a clear break and close below 0.9950 will validate my bearish bias.
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Written by Michael Wright, Currency Analyst
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Michael Wright authors FX Headlines, Fundamentals vs. Technical’s, Intraday Trading, Weekly Spotlight, and Forex Trading Weekly Forecast
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.