When is the US Retail Sales data and how it could affect EUR/USD?

US Retail Sales data Overview

The United States (US) Retail Sales for August is due for release today at 12:30 GMT. The Retail Sales data, a key measure of consumer spending, is expected to have grown at a moderate pace of 0.2%, against a 0.5% increase seen in July. On the contrary, Retail Sales excluding autos is estimated to have risen by 0.4%, faster than the prior reading of 0.3%. Such a scenario indicates a slowdown in the auto demand.

The impact of the Retail Sales data remains significant on market expectations for the Federal Reserve's (Fed) interest rate outlook as the measure of change in the data influences inflation at consumer and the producer level.

Rising households spending reflects a strong demand scenario in the economy, which drives consumer inflation higher and allows business owners to raise prices at factory gates. A scenario that forces Fed officials to adopt a hawkish stance on interest rates. Alternately, signs of a slowdown in the consumer spending allows the Fed to turn dovish on policy rates for boosting the households' demand.

How could the US Retail Sales data affect EUR/USD?

EUR/USD revisits its four-year high slightly above 1.1800 during the European trading session on Tuesday as the US Dollar (USD) faces selling pressure. The US Dollar slumps amid firm expectations that the Fed will cut interest rates in the monetary policy announcement on Wednesday.

On the daily timeframe, EUR/USD stays above the 20-day Exponential Moving Average (EMA), which is around 1.1700, indicating a strong uptrend.

The 14-day Relative Strength Index (RSI) breaks above 60.00, signaling a fresh bullish momentum in the near term.

Looking up the round level figure of 1.1900 and the psychological level of 1.2000 will be key resistance areas for the major currency pair. On the downside, the September low around 1.1600 will be key support zone for the pair.