UK Retail Sales preview: negative data likely to exacerbate Pound's collapse

 The UK is scheduled to publish its Retail Sales report for April this Friday at 8:30 GMT. According to preliminary estimates, sales are expected to have declined by 0.3% in April, after advancing 1.1% in March. The core monthly reading, which excludes volatile oil prices, is seen decreasing by 0.5%. Yearly basis, retail sales are seen up by 4.6% vs. the previous 6.7% gain.

The UK is not doing good in the data front lately, but as inflation released earlier this week missed the market's expectations.  The yearly CPI resulted at 2.1%, better than the previous 1.9%, although below the 2.2% expected. Still, data is the lesser of the concerns for those aiming to buy the Sterling, as Brexit keeps stealing the show.

UK PM May announced this week she would present a revamped withdrawal deal on Friday, only triggering the outrage of allies and enemies within the government.  The Leader of the House of Commons Andrea Leadsom stepped down a few hours after his announcement, while other ministers menaced to follow her lead. The 1922 Committee met, trying to change their rules to allow submitting PM May to another no-confidence vote. They failed to reach an agreement, buying her some additional time, although the treasurer of the Committee, Geoffrey Clifton-Brown, said that they would allow a new no-confidence vote in the PM if she doesn't announce her resignation this Friday.

Meanwhile, May's spokesman hit the wires reporting that PM May was meeting ministers and "listening to their concern on the bill," also repeating that the prime minister is focused on delivering Brexit, making sure that the UK would leave the EU with a deal. She seems to be living in a parallel reality to that of the rest of UK politicians, with the more she does, the more the fury among them.

GBP/USD Technical Outlook

 In this scenario, the GBP/USD pair lost roughly 600 pips ever since topping at 1.3176  this month, and despite a modest bounce Thursday, the extreme oversold conditions persist. Even a better-than-expected Retail Sales' outcome, would likely fall short of moving much the Pound to the upside, and the most likely scenario is that any spike would likely attract sellers. The bearish scenario is will likely be exacerbated by a disappointing figure, with the pair then poised to break below 1.2600.