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

UK retail sales Overview

The UK retail sales data is expected to ease to 0.2% m/m in July, while on annualized basis, retail sales are also seen ticking lower to 1.4%. In June, retail sales were seen at 0.6% over the month. Meanwhile, core retail sales data, excluding fuel, are expected to come in at 0.2% m/m and 1.3% y/y. The report will be published later this session at 0830GMT.

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, a deviation can fuel movements of upto 100 pips.

How could affect GBP/USD?

A positive surprise in the retail sales report could offer fresh impetus to the GBP bulls, taking the rate back towards 1.2950 levels. While a bigger-than expected drop in the retail volumes would knock-off the pair back to 1.2850/45 – key support area.

In terms of technicals, “From current levels, the recovery move could get extended towards an important confluence support break-point now turned strong resistance near the 1.2930 region, comprising of 50-day SMA and 50% Fibonacci retracement level. A convincing break through the mentioned hurdle could trigger a short-covering rally towards the key 1.30 psychological mark, also coinciding with 38.2% Fibonacci retracement level.”

“On the flip side, the 1.2865 region, closely followed by 1.2840 level, remains immediate support levels to defend. A decisive break below the mentioned supports would turn the pair vulnerable to break below the 1.2800 handle and head towards testing 1.2775 support area,” Haresh Menghani, Analyst at FXStreet explained.

Key notes

UK retail sales volumes to fall in July - HSBC

UK: Retail sales likely to post second consecutive 0.6% m/m gain - TDS

About UK retail sales

The retail Sales released by the National Statistics measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of 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.