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 + 0.7% – GBP/USD higher
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 disappointed in January with a decline of 0.3%, short of the estimate of a 0.1% decline. The markets are expecting a sharp turnaround in the February report, with a forecast of a 0.4% gain.
Sentiments and levels
The pound flexed some muscle last week, recovering partially from huge losses since late February. The Fed may have dampened expectations of a rate hike in the next few months, but if US employment data and the GDP release are strong, the dollar could reverse directions this week. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.5296, 1.5008, 1.4813, 1.4621 and 1.4521.
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 1.2%: An unexpected higher reading can send GBP/USD above one resistance line.
- Well above expectations: Above 1.2%: Such an outcome would likely propel the pair upwards, and a second resistance line might be broken as a result.
- Below expectations: -0.4% to 0.0%: A weak reading could push GBP/USD below one level of support.
- Well below expectations: Below -0.4%: 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.
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