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 falls 0.5% – GBP/USD slides
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. Traders should treat this indicator as a market-mover.
The indicator bounced back nicely in February, posting a strong gain of 0.7%. This beat the estimate of 0.4%. The markets are expecting a softer reading in the March report, with an estimate of 0.4%.
Sentiments and levels
We continue to see significant volatility from GBP/USD in the month of April. Despite some weak US numbers in recent weeks, analysts expect a strong spring, and market sentiment remains positive about the US economy. The UK economic picture is generally good, but uncertainty about the upcoming election could shake up the pair, and falling inflation remains a serious worry. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5300, 1.5114, 1.5008, 1.4813 and 1.4621.
5 Scenarios
- Within expectations: 0.5% to 0.8%: In such a case, the pound is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.9% to 1.3%: An unexpected higher reading can send GBP/USD above one resistance line.
- Well above expectations: Above 1.3%: Such an outcome would likely propel the pair upwards, and a second resistance line might be broken as a result.
- Below expectations: 0.0% to 0.4%: A weak reading could push GBP/USD below one level of support.
- Well below expectations: Below -0.0%: A contraction in the indicator could push the pound lower and break a second support level.
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