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

The UK retail sales Overview

The UK retail sales data is expected to rebound by 0.5% m/m in January, while on an annualized basis, retail sales are seen ticking higher by 2.6%. In December, retail sales dropped sharply by -1.5% over the month and 1.4% annually. Meanwhile, core retail sales data, excluding fuel, are expected to come in at 0.6% m/m and 2.5% y/y. The report will be published later this session at 0930 GMT.

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 up to 100 pips.

How could affect GBP/USD?

A much-better than rebound in the UK retail sales data could offer fresh impetus to the GBP bulls, taking the rate back above the 1.4150 barrier. While GBP/USD could revert to the 1.4070-50 support area should the data disappoint. However, the spot could witness significant moves on the UK data, as it is queued up as the first major macro release from the UK docket for this week.

FXStreet’s Analyst, Haresh Menghani, noted, “from a technical perspective, the pair is currently placed near a strong confluence resistance, around the 1.4140-60 region, comprising of a short-term descending trend-line and 23.6% Fibonacci retracement level of 1.3458-1.4345 up-move. A convincing breakthrough the mentioned hurdle is likely to accelerate the up-move back towards reclaiming the 1.4200 handle en-route the next major hurdle near the 1.4260-65 region.” 

“Alternatively, retracement back below 1.4120 level, leading to a subsequent weakness through the 1.4100 handle, might prompt some additional profit-taking slide towards 1.4070-65 intermediate support en-route 1.4040 horizontal level and the key 1.40 psychological mark,” Haresh added.

Key Notes

UK: Looking for a 0.2% m/m gain for January retail sales - TDS

Analysts at TDS are looking for a 0.2% m/m gain for January retail sales (mkt +0.5%), which would be a disappointment after the large -1.5% drop in Dec.

UK Jan retail sales to show the most anemic of rebounds – Societe Generale

Analysts at Societe Generale offer a sneak peek on what to expect from today’s UK retail sales data that will be released at 0930 GMT.

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 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.