When is UK retail sales and how could affect GBP/USD?

Dhwani Mehta FXStreet

UK retail sales Overview

The retail sales data is expected to drop sharply and show a reading of -0.2% m/m in March, while on annualized basis, retail sales are expected to decline to 3.4%. In February, retail sales were seen at 1.4% over the month. 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?

A positive surprise in the retail sales report could help the GBP to extend the bids beyond 1.28 handle on a sustained basis. While a worse-than expected print would knock-off the pair back towards 1.2700. Markets appear to be confused over the outcome.

In terms of technicals, momentum above 1.2851 (Apr 20 high) could lift the pair above 1.2912 (flash rally high), beyond which a test of 1.2950 (psychological levels) is imminent. Conversely, a break below 1.2770 (Apr 20 low), leading to a subsequent break below 1.2758 (5-DMA) is likely to drag the pair towards testing its next support near 1.2730 (classic S2/ Fib S3).

Key notes

UK: Retail sales to post +0.2% m/m gain in March - TDS

Analysts at TDS are looking for UK retail sales to hold up a bit better than consensus with a +0.2% m/m gain in March, while markets look for a similar-sized decline.

UK: Retail sales expected to dip 0.5% MoM in March - Nomura

The research team at Nomura explains that the latest BRC survey showed UK retail sales growth in real terms at its lowest rate for four years and Nomura expects this more marked slowdown to show up in the official data in the months ahead with March numbers at around -0.5% m-o-m and 3.8% y-o-y.

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.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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