The volume of retail sales rose by 1.1% (month over month). It was expected to rise by 0.7% in July, following a rise of 0.2% in June. Year over year, sales rose by 3% – a strong figure. Core retail sales also rose by 1.1%.
GBP/USD was trading higher prior to the release, moving up towards 1.5550. The pair is now at 1.5580. EUR/GBP is tumbling down ,now falling below yesterday’s lows and so far it bottomed out at 0.8525.
As mentioned on the FJ fan page, GBP was front running the publication. So, part of the surprise was already priced into the pair before the publication.
Yesterday, sterling received a shining jobs report that was accompanied by somewhat hawkish MPC Meeting Minutes release. It took the pound some time to digest the news, but it eventually made nice gains, especially against the euro.
All in all, the British economy seems to be growing strongly, even if too much of this growth is in the housing sector. This publication adds fuel to the fire and is certainly encouraging.
The peak seen yesterday was just under 1.5550. Support is at 1.5490. The big target for cable is 1.57, the peak seen earlier this year. For more levels, events and analysis, see the GBPUSD forecast.