When are the UK retail sales and how could they affect GBP/USD?

UK retail sales Overview

The UK retail sales, scheduled to be published later this session at 0830 GMT, are expected to drop 0.4% m/m in September, following an increase of 0.3% in August. Total retail sales are seen rising 3.6% over the year, up from 3.3% in August.

Meanwhile, core retail sales, stripping the basket off motor fuel sales, are seen dropping 0.4% m/m while rising 3.7% y/y.

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, can fuel movements of up to 100 pips.

How could it affect GBP/USD?

FXStreet’s Analyst Haresh Menghani notes: “Looking at the broader picture, the mentioned trend-line, along with another (descending) trend-line, against the backdrop of the downfall since mid-April, now seems to have constituted towards the formation of a bearish pennant on the daily chart. A convincing break below the 1.30 handle will reaffirm the bearish set-up and pave the way for the resumption of the prior bearish trend. Meanwhile, any meaningful recovery back above the 1.3100 handle might now confront fresh supply near mid-1.3100s and is closely followed by the 1.3175-85 horizontal zone.”

Key Notes

Market themes of the Day: UK retail set to slump in September

UK: Small upside risks to September retail sales - TDS

UK: Retail sales likely to fall in September - Nomura

About the UK retail sales

The Retail Sales released by the Office for National Statistics (ONS) measures the total receipts of retail stores. Monthly per cent changes reflect the rate of changes in 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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