The UK retail sales Overview
The UK retail sales are expected to rebound sharply by 0.7% m/m in April, while on an annualized basis, retail sales are seen lower by 0.1%. In March, retail sales arrived at -1.2% over the month and 1.1% annually.
Meanwhile, core retail sales data, excluding fuel, are expected to come in at 0.4% m/m and 0.1% y/y. The report will be published later this session at 0830 GMT.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 70 pips in deviations up to 3.5 to -1.5, although in some cases, if notable enough, a deviation can fuel movements of upto 100 pips.
How could affect GBP/USD?
Upbeat UK retail sales data could take Cable back towards the 1.3380 daily highs while GBP/USD could breach the 1.3300 support area should the data disappoint.
However, the risks remain to the upside after the UK Confederation of British Industry (CBI) realized reported sales figure bounced to 11 versus 5 expected. This release usually serves as a proxy for the UK retail sales reported by the Office for National Statistics (ONS).
FXStreet’s Analyst, Haresh Menghani, noted, “From a technical perspective, this week's bearish break below a two-week-old consolidative trading range suggests further near-term depreciation move, despite highly oversold conditions. Hence, any recovery attempt back above the 1.3400 handle seems more likely to get sold into the trading range support break-point, now turned immediate strong resistance near the 1.3450 region.”
“On the flip side, bears would be eyeing for a decisive break below the 1.3300 handle, below which the pair is likely to extend the bearish trajectory and aim towards testing sub-1.3200 level, marking 50% Fibonacci retracement level of the 1.1987-1.4377 strong up-move,” Haresh added.
Key Notes
GBP/USD looking for some lift from UK retail sales
European FX Outlook: Core UK retail sales are seen picking up in April
About the UK retail sales
TheRetaill Sales released by the Office for National Statistics (ONS) measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive, or bullish for the GBP, while a low reading is seen as negative or bearish.
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