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 only +0.1% – GBP 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, as an unexpected reading can have a major affect on the direction of GBP/USD.
Retail Sales posted a decline in June of 0.2%, the first decline we’ve seen in three months. This reading was well below the forecast of a gain of 0.4%. The markets haven’t changed their forecast for July, with an estimate of +0.4%.
Sentiments and levels
The pair has alternated between weekly gains and losses over the past 6 weeks, as GBP/USD continues to show some volatility. Monetary divergence favors the dollar, but some strong data out of the UK this week could give a boost to cable. 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.
To follow this event live: [do action=”calendar-event” eventid=”9f9b4613-21ff-4cb7-8170-d3f59d2b2fe2″/]
Share
