Home GBP/USD: Trading the UK Retail Sales March 2015

GBP/USD: Trading the UK Retail Sales March 2015

British  Retail Sales is considered one of the most important economic indicators. A reading that is higher than the market forecast is bullish for the British pound.

Update:  UK retail sales + 0.7% – GBP/USD higher

Here are all the details, and 5 possible outcomes for GBP/USD.

Published on  Thursday at 9:30 GMT.

 Indicator Background

Retail  Sales  is  the primary gauge  of consumer spending, a critical component of economic growth.  Traders should treat this indicator as a market-mover.

Retail Sales  disappointed in  January with a decline  of  0.3%,  short  of the estimate of a 0.1% decline.  The  markets are  expecting  a sharp turnaround in  the February report,    with a forecast of a 0.4% gain.

Sentiments and levels

The pound flexed some muscle last week, recovering partially from huge losses since late February. The Fed may have dampened expectations of a rate hike in the next few months, but if US employment data and the GDP release are strong, the dollar could reverse directions this week.  So, the overall sentiment is  bearish on GBP/USD towards this release.

Technical levels, from top to bottom: 1.5296, 1.5008, 1.4813, 1.4621 and 1.4521.

5 Scenarios

  1. Within expectations: 0.1% to 0.7%: In such a case, the  pound is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 0.8% to 1.2%: An unexpected higher reading can send GBP/USD above one resistance line.
  3. Well above expectations: Above 1.2%: Such an outcome would likely propel the pair upwards, and a second resistance line might be broken as a result.
  4. Below expectations: -0.4% to 0.0%: A weak reading could push GBP/USD below one level of support.
  5. Well below expectations: Below -0.4%:  A sharp contraction  by the indicator  could push the pound lower and  break  a second  support level.

For more on the pound, see the GBP/USD forecast.

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.