NEW YORK, U.S. Taxis drive along Times Square. Image source: ©Tupungato © 123RF.com
U.S. retail sales grew markedly in March by 9.8 per cent, beating the preliminary market forecasts of 5.8 per cent. The massive jump in shopping activity improved on the 3 per cent contraction that was recorded a month prior.
The retail sales report of the Census Bureau revealed that the strong consumer confidence was supported by Joe Biden's stimulus checks, which started being sent to American households from mid-March.
U.S. MoM Retail Sales. Image source: TradingEconomics.com
This marks the strongest monthly performance of the U.S. retail sector since May 2020. The ongoing process of reopening the U.S. economy helped as more and more businesses resume operations. The process of reopening the economy is made possible by the ongoing vaccine rollout.
Soaring prices did not impede consumers' demand, which is good news for the retail sector as a whole. Meanwhile, the robustly strengthening labour market is likely to continue supporting heightened consumer spending.
The data is likely to strengthen the U.S. dollar in the near future, despite the greenback's recently observed weakness. As can be seen on the hourly chart below, the EURUSD is due for a bearish correction.
This can be inferred from the rapidly rising bearish momentum, underscored by the MACD indicator. After having established a Shooting Star recently, which is commonly taken to signify a likely bearish reversal, the price action went on to develop a massive Bearish Marubozu candle.
If the EURUSD manages to break down below the 50-day MA (in green), which serves the role of a floating support, the pair would then be able to attempt falling towards the major support level at 1.19000.
EURUSD 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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