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 at 06:00 GMT on Friday, is expected to recede from 3.6% prior advance to 0.7% MoM in August. Even so, total retail sales are seen rising from 1.4% to 3.0% over the year in the reported month.

Meanwhile, core retail sales, stripping the basket off motor fuel sales, are also likely to print mixed readings with 0.4% MoM and 4.2% YoY numbers compared to 2.0% and 3.1% respective priors.

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 80 pips in deviations up to 3.5 to -1.5, although in some cases, if notable enough, can fuel movements of up to 150 pips.

How could it affect GBP/USD?

GBP/USD rides on the US dollar consolidation and fears of another lockdown in the UK while stepping back from the weekly high to 1.2956 during early Friday. With the Bank of England’s (BOE) clear signal to negative rates, today’s UK Retail Sales may offer a little entertainment to the Cable traders unless being extremely different from the forecasts. Though, odds of a gradual recovery could rise on the back of upbeat data, the key to the British GDP, which in turn might recall the bulls that have dominated so far this week.

TD Securities anticipate a mild recovery in the UK Retail Sales figures as they say,

We look for retail sales to come in flat in August (market forecast 0.8%), ending the string of strong gains. The main source of weakness is likely to be food store sales, with Eat Out to Help Out helping to normalise eating out at restaurants again (which are not included in UK retail sales), leaving grocery store sales a bit lower. On the other side of the coin, while we may still see the level of sales edge back toward something more normal for clothing stores and department stores, the increases are likely to be much smaller, as the larger, easy gains are likely behind us now.

Technically, GBP/USD stays mildly offered around 1.2960 while heading into the London open on Friday. a falling trend line from September 10, at 1.2997 now, nears the 1.3000 psychological magnet to challenge the buyers at first. Following that, a joint of 100-bar and 200-bar EMAs around 1.3030 becomes the key to watch. With the MACD flashing bullish signals, the GBP/USD prices are likely to keep the upside momentum but will wait for a clear break above 1.3030 to challenge 1.3060 and September 04 low near 1.3175. Meanwhile, the 1.2900 round-figures can entertain the intraday swing traders before diverting market attention to the short-term support line, currently around 1.2870.

Key notes

GBP/USD Forecast: Brexit hopes overshadowed a dovish BOE

GBP/USD Price Analysis: Bulls look for entries only beyond 1.3030

About the UK Retail Sales

The retail sales released by the Office for National Statistics (ONS) measures the total receipts of retail stores. Monthly percent 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.