Home GBP/USD: Trading the British Retail Sales Jul 2015

GBP/USD: Trading the British Retail Sales Jul 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.

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

Published on Thursday at 8:30 GMT.

 Indicator Background

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

Retail Sales  softened in  May to  0.2%, which was within expectations.  The markets are expecting better news in the June report, with the estimate standing at 0.4%.

Sentiments and levels

Recent US  data has been lukewarm,  as  underscored by last week’s retail sales and consumer  confidence.  However, Yellen’s relatively upbeat comments  indicate that a rate hike is not far away. The Greek crisis is on the backburner again, at least for now, and this is bullish for the pound, with its close ties with the Eurozone. So, the overall sentiment is  neutral on GBP/USD towards this release.

Technical levels, from top to bottom: 1.5909, 1.5769, 1.5682, 1.5590, 1.5485  and 1.5341.

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 1.1%: An unexpected higher reading can send GBP/USD above one resistance line.
  3. Well above expectations: Above 1.1%: Such an outcome would likely propel the pair upwards, and a second resistance line might be broken as a result.
  4. Below expectations: -0.3% to 0.0%: A weak reading could push GBP/USD below one level of support.
  5. Well below expectations: Below -0.3%:  A significant 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.