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When are the UK retail sales and how could they affect GBP/USD?

UK retail sales Overview

The UK retail sales, scheduled to be published later this session at 0930 GMT, are expected to rebound 0.3% m/m in November, following a drop of 0.5% seen in October. Total retail sales are seen arriving at 1.9% over the year, down from 2.2% booked previously.

Meanwhile, core retail sales, stripping the basket off motor fuel sales, are seen bouncing 0.2% m/m while rising 2.3% y/y.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 70 pips in deviations up to 3.5 to -1.5, although in some cases, if notable enough, can fuel movements of up to 100 pips.

How could it affect GBP/USD?

FXStreet’s Analyst Haresh Menghani notes: “From a technical perspective, intraday pull-backs have been finding decent dip-buying interest near a short-term ascending trend-line resistance break-point, now turned support. Hence, bearish traders are likely to wait for a convincing breakthrough the mentioned support before positioning for the resumption of the pair's prior depreciating move. On a sustained weakness below the 1.2600 handle, the pair is likely to accelerate the fall towards the 1.2540-35 intermediate horizontal support before eventually dropping to test the key 1.2500 psychological mark.”

“On the flip side, any further up-move now seems to confront immediate resistance at another descending trend-line, currently near the 1.2665 region, which if cleared will reinforce near-term bullish breakout and lift the pair back beyond the 1.2700 handle towards testing the 1.2720-25 supply zone,” Haresh adds.

Key Notes

Market themes of the Day: The Bank of England is set to keep the Bank rate on hold amid Brexit uncertainty and weak UK retail sales

BoE and Riksbank in focus today – Danske Bank

GBP/USD: Consolidating at the moment – Commerzbank   

About the UK retail sales

The Retail Sales released by the Office for National Statistics (ONS) measures the total receipts of retail stores. Monthly per cent changes reflect the rate of changes in such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive, or bullish for the GBP, while a low reading is seen as negative or bearish.

 

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