The US Retail Sales report is about to be released and it is 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 the market is undecided. Hopefully, the US Retail Sales report will give us a direction.
Are the US retail sales going to pick up this time?
Retail Sales Coming Up
Retail sales have been missing expectations in the last several months. Core retail sales haven’t been posting negative numbers, but in the last 3 months, the numbers have been weak and below expectations.
The headline retail sales number though, has been negative in the last 2 months. February came at -0.3%, while March came at -0.1%. That’s surprising, considering 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 well, 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.
Wages have also been lagging as economic recovery extends further. Retail sales have been negative in the last 3 months and if we get another negative number this time, then it 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 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 also began turning bullish, and increasing its value by more than 30%.
The climb seems to have stopped, at least for the time being. 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 does not change. Otherwise, if the big trend turns 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 changes.
The resistance is not easy to overcome
Trades in Sight
- The trend is bullish
- The 50 SMA will likely provide support
- The retrace looks complete
The 50 SMA is a great place to buy
We've had a few winning signals on NZD/USD. We've been buying the pullbacks lower, which has resulted in a successful strategy. Today, this pair has retraced lower again, so it looks like a good opportunity to go long.
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 on one of the major Forex pairs.