US Retail Sales, along with data on employment and GDP, is one of the most important fundamental indicators that has a very large impact on the Forex market.US Retail sales index demonstrates the change in the volume of sales in the retail trade of the USA. In other words, this index shows the sales activity for the American consumers and the level of demand for goods of all types. This indicator takes into account both the sale for cash or on credit. Retail Sales Index is necessarily used in the calculation of gross domestic product (GDP).

Retail sales include goods which have characteristics as durables:

• furniture;
• building materials;
• technology and other.

Another category of products is short-term use:

• clothing and footwear;
• food and beverages;
• books and CDs;
• gasoline;
• cosmetics;
• drugs, etc.

US Retail sales index is calculated on the basis of available data from 5000 different companies. At 2/3 this figure is made up of short-term use of products that are often bought. Food is traditionally occupying a large share in this niche (about 20%).
It must be remembered that the rate of retail sales is dependent on business cycles and seasons. For example, before Christmas, in November and December, the demand for all product groups increased several times compared to ordinary days. That is why the data releases seasonally adjusted.

US Retail Sales and its impact on Forex market

It's no secret that the demand and costs of citizens of any country are in direct proportion to the level of their wages, the overall economic stability and confidence in the future. Thus, the higher the retail sales, the better the state of the national economy.
US retail sales data released regularly in the middle of each month, at 9.30 AM EST. The exact date of release you can clarify in economic calendar.

The high level of retail sales has a positive effect on the market. From this we can infer that the growth of this indicator contributes to the growth rate of the American dollar. All this is true, but other than the Retail Sales index here still need to consider the policy of the Federal Reserve System (US Fed). If on the background of this index Fed also intends to strengthen monetary control, the likelihood that the dollar will go up is very high.

If the policy of the American regulator eases or remain unchanged, Forex traders may be interested in investments in other assets, which will reduce the value of the dollar.
US Retail sales index has an impact on the market in the medium and long term. Clear signal to the trader for entering the market is changing of retail sales’ figure by 0.4% compared to its previous value.
Waiting for the release of the US Retail Sales, traders need to make trading strategies designed for different situations, such as possible increasing in index value or vice versa.