Breakdown of the latest developments on the global exchanges
Feb 17, 2021, 2:42 PM GMT

U.S. Retail Sales for January Shatter All Preliminary Forecasts

iPad Pro section at the Apple store in Aventura mall, Florida

The Census Bureau in the U.S. just posted the Retail Sales numbers for January, which grew by 5.3 per cent over the previous month. This performance completely outstripped the initial market forecasts, which were anticipating a much more moderate growth of just 1.1 per cent.

January's performance marks a sudden positive rebound from December's contraction of 0.7 per cent, as the market continues to be driven by heightened vaccine optimism. Consumer sentiment is once again recuperating as a result of it.

U.S. Retail Sales

Apart from being the strongest performance on record since last June, this also means that the pace of recovery in the U.S. is once again accelerating, which is inlined with FED's projections for uneven stabilisation over the next several quarters.

According to the findings of the report, the biggest increases were seen in the sales of electronic appliances, which is unsurprising for the month of January. At this time of the year, many retailers have huge discounts, which fosters demand.

The biggest question now is whether this heightened demand will persist over the next few weeks, enough to offset some of the massive pressure that is currently being exerted on the dollar. This pressure is partly the result of high energy prices, and partly the result of waning demand for low-risk securities.

In the short-term, however, the greenback is advancing against most other currencies, which is inlined with our earlier projections. As can be seen on the 15 Min chart below, the EURUSD broke down below the lower boundary of a Falling Wedge immediately following the publication of the sales data.

The price action continues to be concentrated below the 50-day MA (in green) and the 100-day MA (in blue), which underpins the strong bearish bias in the short-term. Meanwhile, the underlying momentum is also turning ostensibly bearish, as demonstrated by the MACD indicator.

EURUSD 15 Min Price Chart