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US dollar

USD Index Remains Bullish After Retail Sales Report

Posted Thursday, November 15, 2018 by
Shain Vernier • 2 min read

The combination of uncertainty surrounding a Brexit deal and strong U.S. Retail Sales (Oct.) numbers have the USD Index trading to the bull. After a minor correction on Tuesday and Wednesday, December USD Index futures are in positive territory above the 96.900 level. The daily uptrend from last week is intact and values are on the march north.

Earlier, I talked about how Retail Sales and the Philadelphia FED Survey were positioned to influence U.S. stocks today. Well, here is an exclusive look at the Retail Sales report from the U.S. pre-market hours:

Event                                                   Projected      Actual

Retail Sales (MoM, Oct.)                          0.5%              0.8%

Retail Sales Control Group (Oct.)          0.4%              0.3%

Import Price Index (MoM, Oct.)            0.1%              0.5%

Retail Sales ex Autos (MoM, Oct.)         0.5%              0.7%

Aside from a slumping Retail Sales Control Group (Oct.), total receipts from retailers in October was strong. Another statistic worth looking at was today’s Import Price Index (MoM, Oct.) This report came in well above expectations, signaling growing inflation. While the Import Price Index is a secondary economic metric, today’s release certainly reinforces the FED’s case for gradual tightening.

December USD Index Futures

The daily December USD Index futures chart is a classic illustration of a 38% Fibonacci retracement proving valid. At press time, rates are above this level, preserving a bullish bias.

December USD Index Futures (DX), Daily Chart
December USD Index Futures (DX), Daily Chart

Here are two levels to watch until Friday’s closing bell:

  • Resistance(1): Psyche Level, 97.500
  • Support(1): 38% Current Wave Retracement, 96.750

Overview: From a technical perspective, the December USD Index is entering a bullish consolidation pattern. As long as price remains above the 38% retracement (96.750), then buying is warranted.

The remainder of this week’s economic calendar is open facing the USD. However, remember that the December FED meeting is only a little over a month away. As we roll toward this all important event, the USD Index will be sure to move, likely toward the 97.500 level.

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