UK retail sales Overview
The retail sales data is expected to rebound sharply to 0.4% m/m in June, while on annualized basis, retail sales are expected to jump to 2.5%. In May, retail sales were seen at -1.2% over the month. The report will be published later this session at 0830GMT.
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?
A positive surprise in the retail sales report could rescue the GBP bulls, taking the rate back above 1.3000 levels. While a worse-than expected print would knock-off the pair back towards the mid-point of 1.29 handle.
In terms of technicals, “On the downside, the session low of 1.3010 and the 18 July low of 1.3004 will provide the initial support, but a break of 1.3000 could have us quickly back 1.2980, below which could then head to the 14 July’s low of 1.2933 although this seems unlikely today.”
“On the topside, back above 1.3100 would see good sellers once again at 1.3115/25, but above which there is little to stop Cable heading on towards 1.3200 and then to 1.3280. Above there would be increasingly bullish, possibly opening up the major Fibo pivot at 1.3420 (50% pivot of 1.5017/1.1821) although this currently remains over the horizon,” Jim Langlands at FX Charts noted.
Key notes
UK: Retail sales to post flat reading of 0.4% for June - TDS
GBP/USD Forecast: holding above 1.30 important pivot ahead of UK retail sales
About UK retail sales
The retail Sales released by the National Statistics 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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