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UK retail sales badly disappoint, falling 0.8% – GBP

Retail sales dropped by 0.8% m/m in the UK, much  worse than -0.1% expected and with a downward revision. Year over year, sales are up only 1.2$ against 2.1% expected. Excluding fuel, sales are down 0.7% instead of +0and up only 1.6% y/y instead of 2.4% predicted. Downward revisions accompany all the numbers.

GBP/USD is down to 1.3140 in the immediate aftermath. The pair was challenging resistance at 1.3230 earlier in the day, and that line certainly rejected the pair’s rise.

The pound had already suffered this week. Governor Mark Carney did not show enthusiasm for raising rates apart from the well-telegraphed hike in November. He may have good reasons, according to the data published today.  On the other hand, inflation reached 3% and wages came out slightly better than expected.

Yet the biggest elephant is Brexit. May’s trip to Brussels did not go down quite well, to say the least. The EU is unlikely to open talks on future arrangements before Britain pays the “divorce bill”.

The EU continues treating the UK like Greece.

Further support is quite close, at 1.3130. The next level to watch out for is 1.3030.

more coming

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.