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
- 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.
- Above expectations: 0.8% to 1.1%: An unexpected higher reading can send GBP/USD above one resistance line.
- 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.
- Below expectations: -0.3% to 0.0%: A weak reading could push GBP/USD below one level of support.
- 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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