GBP Remains Under Pressure on Subdued UK Retail Sales Data
- A mixed batch of data with expectations exceeded but downward revisions to last month’s figures.
- GBP remains under pressure with little to provide support in the short-term
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UK retail sales data for July beat market expectations but last month’s strong figures were revised a touch lower, leaving a mixed picture for the British Pound. Monthly sales rose by 0.3%, beating expectations of a 0.2% rise, but June’s 0.6% gain was revised down to 0.3%. On an annual basis, sales rose by 1.4% against expectations of a 1.3% gain, with June’s 2.9% rise downgraded to 2.8%.
Ole Black, ONS senior statistician, said:"The underlying trend at the beginning од 2017 showed a relatively subdued picture in retail sales. Strong food sales have been responsible for the growth of 0.3% in July compared with June, as all other main sectors have shown a decrease. Whilst the overall growth is the same as in June, trends in growth in different sectors are proving quite volatile."
Earlier this week data showed UK unemployment falling to 4.4% from 4.5%, the lowest level since 1975, while the employment rate rose to a new record high of 75.1%, data released by the Office for National Statistics (ONS) showed. Average weekly earnings in the UK also rose by 2.1% on a three-month year-on-year basis beating expectations of a 1.9% rise and a prior month’s level of 1.8%.
Chart: GBPUSD 5 Minute Timeframe (August 17, 2017)
Retail trader data shows 54.8% of traders are net-long (GBPUSD) with the ratio of traders long to short at 1.21 to 1. The number of traders net-long is 8.4% higher than yesterday and 36.6% higher from last week, while the number of traders net-short is 0.7% higher than yesterday and 12.1% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBPUSD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPUSD-bearish contrarian trading bias.
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--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.