We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The price of #gold may continue to exhibit a bullish behavior in June as the pullback from the yearly high ($1765) reverses ahead of the May low ($1670). Get your Gold market update from @DavidJSong here: https://t.co/OeaYtCpcIo https://t.co/UQVPIVCTCP
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/GzEp3gCAe5
  • US equities continue to run higher with the Nasdaq 100 setting a fresh all-time-high, not even three months after giving back almost a third of its value in about a month. Get your #Nasdaq technical analysis from @JStanleyFX here: https://t.co/1LI54uvI8x https://t.co/e9FvSLqfaA
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/UyQ4i0AihI
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/KQcLLrkMP3
  • AUD/USD has had the most impressive show of trend over the past couple of months with the pair gaining almost 1500 pips from the March low. Get your $AUDUSD technical analysis from @JStanleyFX here: https://t.co/vLz4Rpln3u https://t.co/AOwnJja5V8
  • Has the #Euro been saved? Find out from @CVecchioFX here: https://t.co/eiXfOTyGa6 https://t.co/AyRiYpb4cN
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ygwjGNvS61
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/THWhPAS6AM
GBPUSD- Will U.K. Retail Sales Spark a Bullish Breakout?

GBPUSD- Will U.K. Retail Sales Spark a Bullish Breakout?

2013-08-15 04:00:00
David Song, Strategist
Share:

Trading the News: U.K. Retail Sales

U.K. Retail Sales are expected to increase for the third consecutive month in July and a pickup in private sector consumption may spur a bullish breakout in the GBPUSD as it remains one of the leading drivers of growth.

What’s Expected:

Time of release: 08/15/2013 8:30 GMT, 4:30 EDT

Primary Pair Impact: GBPUSD

Expected: 0.6%

Previous: 0.2%

DailyFX Forecast: 0.2% to 1.0%

Why Is This Event Important:

Should household spending pickup in July, a positive sales report may raise the scope of seeing the Bank of England (BoE) normalize monetary policy ahead of schedule, and the British Pound may continue to outperform against its major counterparts amid the shift in the policy outlook.

Bullish Argument/Scenario

Release

Expected

Actual

Jobless Claims Change (JUL)

-15.0K

-29.2K

Average Weekly Earnings inc Bonus (MAY)

2.0%

2.1%

GfK Consumer Confidence (JUL)

-19

-16

The pickup in wage growth along with the ongoing improvement in consumer sentiment raises the scope of seeing a marked rise in retail sales, and a positive print may spark a growing rift within the BoE as Monetary Policy Committee member Martin Weale dissents against the majority.

Bearish Argument/Scenario

Release

Expected

Actual

Consumer Price Index (YoY) (JUL)

2.8%

2.8%

Producer Price Index- Output n.s.a. (YoY) (JUN)

2.1%

2.1%

Net Consumer Credit (JUN)

0.7B

0.5B

However, sticky inflation paired with the slowdown in private credit may prompt U.K. households to scale back on spending, and BoE Governor Mark Carney may keep the door open to expand the balance sheet further in an effort to encourage a stronger recovery.

How To Trade This Event Risk

Should U.K. retail sales increase 0.6% or greater in July, we will need to see a green, five-minute candle following the release to consider a buy entry on two-lots of GBPUSD. If the market reaction favors a long trade, we will set the initial stop at the nearby swing low or a reasonable distance from the entry, and this risk will establish our first objective. The second target will be based on discretion, and we will move the stop on the second-lot to cost once the first trade hits its mark in order to protect our profits.

On the other hand, a dismal print should keep the GBPUSD within the downward trend from earlier this year, and we will implement the same strategy for a short pound-dollar trade as the long position laid out above, just in the opposite direction.

Potential Price Targets For The Release

GBPUSD Daily

Forex_GBPUSD-_Will_U.K._Retail_Sales_Spark_a_Bullish_Breakout_body_ScreenShot299.png, GBPUSD- Will U.K. Retail Sales Spark a Bullish Breakout?

Although the British Pound remains stuck in the downward trend from earlier this year, a third straight rise in U.K. retail sales may pave the way for a bullish breakout. In turn, we may see the GBPUSD make a more meaningful run at the 78.6% Fibonacci expansion around 1.5610-20, but the pair may fall back towards trendline support (which lies up with the 38.2% expansion- 1.5300) should the data disappoint.

Impact that the U.K. Retail Sales report has had on GBP during the last month

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JUN 2013

07/18/2013 8:30 GMT

0.2%

0.2%

+45

+63

June 2013 U.K. Retail Sales

Forex_GBPUSD-_Will_U.K._Retail_Sales_Spark_a_Bullish_Breakout_body_ScreenShot298.png, GBPUSD- Will U.K. Retail Sales Spark a Bullish Breakout?

Retail spending in the U.K. increased another 0.2% after expanding 2.1% the month prior, and the BoE may find it increasingly difficult to preserve its highly accommodative policy stance as the central bank anticipates a faster recovery in the second-half of the year. Indeed, the British Pound trader higher following the print, with the GBPUSD climbing above the 1.5200 handle, and the sterling continued to gain ground during the North American trade as the pair ended the day at 1.5222.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com

Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, please follow this link.

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Fill Out This Quick Form for a Free Tutorial

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.