FX traders were casting a wandering eye ahead toward a long holiday weekend this morning, but the US retail sales report pulled their attention back to their monitors.

After a disappointing -0.2% m/m reading in February, US retail sales surged 1.6% in March, with “core” sales (ex-automobile purchases) also coming in strong at 1.2% m/m. The stellar reading on the US consumer, combined with disappointing manufacturing data out of Germany and France, has reinforced the “best house in a bad global neighborhood” trade for the US economy and taken the US dollar index up to test key resistance at its 10-month high in the mid-97.00s:

- advertisement -

Source: TradingView, FOREX.com

From a technical perspective, the dollar index is showing a large “ascending triangle” pattern, which could foreshadow an explosive rally if the 97.70 barrier is eclipsed. That said, with many financial centers out on holiday tomorrow and on Monday, the lack of newsflow could keep the dollar index contained for now.

Looking ahead to next week, next Friday’s advance Q1 GDP report will be the marquee event. After today’s blowout retail sales report, the Atlanta Fed’s GDPNow model is pointing toward a 2.8% annualized growth rate in Q1; a reading in that range could be the catalyst for a big bullish breakout in the buck next week.

Previous articleUSD/TRY: One to Watch
Next articleThe Weekly Bottom Line: Spring is Coming
DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.