GBP/USD: All eyes on UK retail sales

GBP/USD tests the 1.2800 mark before the European markets open on Friday.
Brexit developments have been negative for the pair off-late.
January month UK retail sales will be next on cards.

Anil Panchal FXStreet

The GBP/USD pair trades around 1.2800 heading towards European session on Friday. The pair declined the previous day after the UK PM Theresa May lost the vote to delay Brexit by three months in the parliament. Investors will now look forward to the January month release of the UK Retail Sales in order to determine near-term moves.

The UK PM May sought to affirm support in the parliament on her new plan after the old one was rejected previously. Out of the many amendments, the one that got many hits was the failure to get support for delayed Brexit. With the defeat, it was also revealed that Theresa May losses her grip over the parliament and may damage the chances of her victory in future votings concerning Brexit.

Looking forward, January month retail sales will become an important reading for the GBP traders. The retail sales is key to the British GDP. Forecasts suggest +0.2% growth on a monthly basis after witnessing -0.9% contraction earlier whereas the YoY figures may increase to +3.4% from +3.0% growth registered during January 2018.

Other than the UK retail sales, developments relating to Brexit as well as the US-China trade discussions going on Beijing could also direct near-term trade sentiment of the GBP/USD pair.

GBP/USD Technical Analysis

Sustained break of 1.2800 can drag the GBP/USD pair to 1.2740 & 1.2700 whereas 1.2670 could please sellers on the break of 1.2700.

Meanwhile, 1.2880 and a downward sloping trend-line connecting recent highs, at 1.2920, may keep restricting immediate upside. During the pair’s rise past-1.2920, 1.2980 and 1.3000 become crucial to vote.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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