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 come in at 0.7% MoM in December, following -0.6% seen in November. Total retail sales are seen arriving at 2.6% over the year in the reported month, up from 1.0% booked previously.
Meanwhile, core retail sales, stripping the basket off motor fuel sales, are seen rebounding 0.5% MoM while rising sharply by 2.9% YoY.
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, the ongoing positive momentum now seems to have paused near a confluence resistance – comprising of 200-period SMA on the 4-hourly chart and the top end of a three-week-old descending trend-channel. A sustained strength above the mentioned barrier might now be seen as a key trigger for bullish traders and lift the pair beyond the 1.3100 handle, towards testing the next resistance near the 1.3165-70 region.”
“On the flip side, immediate support is now pegged near the 1.3055-50 region, which if broken might accelerate the slide back towards the key 1.30 psychological mark. Failure to defend the mentioned support, leading to a subsequent weakness below the 1.2985-80 region might turn the pair vulnerable to aim towards testing the trend-channel support (sub-1.2900 levels)”, Haresh adds.
At the press time, the Cable continues to trade in a familiar range around 1.3080, almost unchanged on the day. The upbeat Chinese data-led risk-on sentiment undermines the sentiment around the greenback across the board, in turn, lending support to GBP/USD.
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About the UK Retail Sales
The retail sales released by the Office for National Statistics (ONS) measures the total receipts of retail stores. Monthly percent 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.