Are the US retail sales going to pick up this time?

The US retail sales are about to be released and they are the biggest data release today, so I suppose the market is anticipating it. The price action in most forex majors has been mixed which means that the market is undecided. Hopefully, the US retail sales report will give us a direction.

Retail Sales Coming Up

Retail sales have been missing exp3ctations in the last several months. Core retail sales haven’t been posting negative numbers, but in the last three months the numbers have been weak and below expectations.

The headline retail sales number though, has been negative in the last two months. February came at -0.3% while March came at -0.1%. That’s surprising considering that the US economy has been improving considerably in the last several months. At least, that’s what the FED has been telling us.

In fact, the US economy is doing pretty good, but there are caveats. The FED (Federal Reserve) is saying that inflation is picking up and it will reach the target at 2% this year but I don’t see any real inflationary pressure.

The wages have also been lagging as the economic recovery extends further. The retail sales have been negative in the last three months and if we get another negative number this time, then retail sales will be another headache for the FED.

This means that they will probably reassess the rate hike path for this year. So, a negative number today is likely to send the US Dollar tumbling. Retail sales haven’t been a major market mover recently, but they might be today if the numbers are bad.

Decisive Time for Cryptocurrencies

Cryptocurrencies have been trading on a downtrend since late December. The massive bullish trend that we saw last year shifted as the gold rush for cryptos wore out and it’s been a one way street since then.

The jumps have been relatively shallow so the buyers have had a tough time. Last week though, cryptocurrencies started forming a reversal after the doji candlestick on the weekly chart the previous week.

Bitcoin climbed more than $1,600 last week, while Ethereum climbed $160. That means that Ethereum appreciated more than 30% during this time. Litecoin started turning bullish too and it also increased its value more than 30%.

But, the climb seems to have stopped now, at least for the time being. The buyers are finding it tough to take out the resistance at $134. But even if they do, the 100 SMA (red) is waiting above here. The daily chart is almost overbought. So, the retrace up might have reached its limit.

That’s if the trend is not changing. Otherwise, if the big trend is turning bullish, then the 100 SMA on top should be broken sometime this week. So, we will sit on the sidelines to see if the trend is really changing.

The resistance is not easy to overcome

Trades in Sight

Bullish NZD/USD

1. The trend has is bullish
2. The 50 SMA will likely provide support
3. The retrace looks complete

The 50 SMA is a great place to buy

We have had a few winning signals on NZD/USD. We have been buying the pullbacks lower which has resulted a successful strategy. Today, this pair has retraced lower again, so it looks like a good opportunity to go long.

In Conclusion

We would have bought NZD/USD now, but the US retail sales report is about to be released very soon. So, we are staying out at the moment to see what’s in store, before making a move in one of major fore pairs.