US Retail Sales Up Next

US data is back in the spotlight today as traders ready themselves for the latest set of retail sales data. On the back of the sharp drop we’ve seen in CPI and PPI data, USD has been trending lower across the week as traders scale back their rate forecasts for the year ahead. Pricing for Fed rate cuts later in the year has jumped significantly in the wake of the recent banking sector turmoil we’ve seen.

With recession risks back in focus, today’s retail sales will draw plenty of attention and given the negative forecasts, there is plenty of room for USD to continue lower near-term should data underscore fresh weakness in the US economy.

Today’s Numbers

In terms of numbers, the market is looking for headline retail sales at -0.4% , unchanged from last month with core retail sales of -0.4%, down from -0.1% last month. If confirmed, this data should keep downward pressure on USD, keeping the focus on recession risks and potential Fed rate cuts later in the year. However, given the negative sentiment around USD currently, any upside surprise today might well fuel a sharp short-covering rally in USD, creating plenty of two-way risk into the release.

Technical Views

S&P 500

The market continues to push against the 4153.50 level resistance. This is a major pivot area for the market and a break above here will be firmly bullish creating a platform for a fuller advance through 4305 and 4396.25 thereafter.