GBP/USD: Trading the British Retail Sales Nov 2015

GBP/USD: Trading the British Retail Sales Nov 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.

Update:  UK retail sales disappoint – GBP/USD slips

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

Published on Thursday at 9:30 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.

Retail Sales  surged in September, with a gain of 1.9%,  crushing the estimate  of 0.3%.  This marked the indicator’s sharpest gain since December 2013. The markets are braced for a downturn in October, with an estimate of -0.4%. Will the indicator repeat and beat the prediction?

Sentiments and levels

The  guessing game continues as to whether the Fed will raise rates next month. US employment numbers are solid, but inflation remains at low levels.  Market expectations for a rate hike currently stand at 66%, and this is certainly bullish for the dollar.  So, the overall sentiment is  bearish on GBP/USD towards this release.

Technical levels, from top to bottom: 1.5485, 1.5341, 1.5269, 1.5163. 1.5026  and 1.4856.

5 Scenarios

  1. Within expectations: -0.7% to -0.1%: In such a case, the  pound is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 0.0% to 0.4%: A reading  of zero or in positive territory  could send GBP/USD above one resistance line.
  3. Well above expectations: Above 0.4%: Such an outcome would likely propel the pair upwards, and a second resistance line might be broken as a result.
  4. Below expectations: -1.2% to -0.8%: A weak reading could push GBP/USD below one level of support.
  5. Well below expectations: Below -1.2%:  A sharp 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

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.