When are the UK Retail Sales and how could they affect GBP/USD?

The UK Retail Sales Overview

The UK Retail Sales, scheduled to be published later this session at 0600 GMT, are expected to have registered a growth of 0.2% in July, compared to a 0.9% increase seen in the previous month. On an annualized basis, Retail Sales are seen rising 1.3% during the reported month, down from 1.7% booked in June.

Meanwhile, core Retail Sales, stripping the basket of motor fuel sales, are anticipated to have climbed by 0.4% MoM and by 1.2% over the year, lower than 0.6% and 1.8%, respectively.

How could the UK Retail Sales affect GBP/USD?

A robust consumer spending, which generally supports the British Pound (GBP), could exert some pressure on the GBP/USD pair amid the lack of US Dollar (USD) buying interest. In contrast, the market reaction to a disappointing report is more likely to be limited as traders keenly await the release of the US Nonfarm Payrolls (NFP) report, due later during the North American session.

FXStreet's Lead Analyst, Eren Sengezer, noted, "1.3440-1.3460, where the 200-period SMA, Fibonacci 50% retracement of the latest downtrend and the 100-day SMA are located, remains intact as resistance. In case GBP/USD clears that hurdle, 1.3490-1.3500 (round level, 100-period SMA) could be seen as the next resistance level before 1.3535 (Fibonacci 61.8% retracement)."

"Looking south, support levels could be seen at 1.3390-1.3400 (Fibonacci 38.2% retracement, round level), 1.3330 (static level) and 1.3300 (Fibonacci 23.6% retracement),” Eren adds.

Key Notes

Pound Sterling finds support as UK gilt yields stretch lower

GBP/USD settles into holding pattern ahead of key US NFP jobs data

GBP is outperforming with modest gain – Scotiabank

About the UK Retail Sales

The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.