GBP/USD - Will UK retail sales beat estimates and boost Pound?

Omkar Godbole FXStreet Contributor

Despite being overbought as per the 14-day RSI, GBP/USD found takers around the 5-DMA level of 1.3503 in Asia and rose to 1.3530 levels.

Ahead of the FOMC rate decision, the GBP/USD pair could take cues from the UK retail sales due at 08:30GMT.

Retail sales to beat estimates?

The official data due today is expected to show retail sales rose 0.2%m/m and 1.4% y/y in August. The core retail sales, which exclude fuel, are seen rising 0.2% m/m and 1.4% y/y.

The leading indicators released earlier this month showed the retail sales pick up pace in August. The British Retail Consortium [BRC] data released on September 4 showed like-for-like sales rose 1.3% in August, against a 0.9% fall for the same month in 2016. Online non-food sales rose 11% in August compared to 8.8% for the same month last year.

Thus, the Pound could remain bid in early Europe in anticipation of a better-than-expected retail sales figure. A strong data could see the US-UK 10-year yield spread narrow further in favor of the GBP. However, caution is still advised as GBP/USD is overbought as per the daily indicators.

On the other hand, a slight miss on the expectations may yield a relatively strong pull back given the overbought technical conditions.

GBP/USD Technical Levels

FXStreet Chief Analyst Valeria Bednarik writes, " Technically, the pair is at risk of extending its decline, as after moving back and forth, it settled around the 23.6% retracement of its latest bullish run, at 1.3505, but below a still bullish 20 SMA, according to the 4 hours chart. Technical indicators in the mentioned time frame have extended their declines, with the Momentum further accelerating below its mid-line, but the RSI currently at 55. Should the pair break below 1.3440, the 38.2% retracement of the mentioned rally, bulls will probably keep pulling back, resulting in another day of downward moves.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.