US Retail Sales solid for January

There is an adage on Wall Street: “Never underestimate the American consumer", which appears appropriate for January's retail sales data

FOREX 7

Headline US Retail Sales for January were up 3.8% MoM vs an estimate of only 2% MoM.  This was the biggest jump since March 2021.  In addition, December’s print was revised lower from -1.9% MoM to -2.5% MoM. Also, January’s Retail Sales ex-Autos was 3.3% MoM vs 0.8% MoM expected and -2.8% MoM in December.  Many analysts had estimated that a higher expected headline number would be due to the increasing auto sales (and increasing costs to auto sales), however that doesn’t seem to be the case.  Retail sales ex-Gas and Autos were even stronger at 3.8% MoM vs 0.4% MoM expected! These numbers would suggest that people were spending in January,  despite higher prices due to inflation!

EUR/USD is hovering just above the 50 Day Moving Average at 1.1328 and the top, downward sloping trendline of the channel that the pair has been in since May 2021.  Horizontal resistance sits at today’s highs near 1.1395.  If EUR/USD can trade above today’s highs and the horizontal resistance, it may be wide open for a move back to 1.1500, which has been capping any rallies as of late.  Resistance is at the February 10th highs of 1.1497 (very close to 1.1500). Above there, resistance on the daily timeframe is at the 127.2% Fibonacci extension from the highs of January 14th to the lows of January 28th, near 1.1581, and then the 200 Day Moving Average at 1.1649.

20220216 eurusd daily

Source: Tradingview, Stone X

On a 240-minute timeframe, first support is at the top, downward sloping trendline of the long-term channel near 1.1300.  Below there is a confluence of support at the February 14th lows, horizontal support and the 61.8% Fibonacci retracement from the lows January 28th to the highs of February 10th between 1.1263 and 1.1280.  If price breaks below there, if can fall to horizontal support at 1.1186 and then previous lows at 1.1121.

20220216 eurusd 240

Source: Tradingview, Stone X

There is an adage on Wall Street: “Never underestimate the American consumer.”  That saying appears to fit the outcome of the January Retail Sales data.  With the actual readings beating estimates across the board, one must consider that the rise may have to do as much with the demand for products as it does with the prices Americans are paying for the products!

 

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account