UK retail sales preview: What to expect of GBP/USD?

The GBP/USD pair picked-up significant strength last hours, and headed higher for a retest of daily highs at 1.3276, before meeting fresh offers near 1.3270 region, with the bears now pushing the rate back below the mid-point of 1.32 handle.

Weak retail sales expected in June on Brexit uncertainty

The retail sale data is expected to a fall back 0.8% m/min June, while retail sales are still expected to edge 4.8% higher y/y. In May, retail sales rose 0.9% over the month, beating the market expectations and following the 1.9% spike in April.

 A positive surprise (which remains unlikely) could provide extra legs to the ongoing bullish momentum in the GBP/USD pair, driving the rate above 1.33 handle. On the other hand, should the data come in worse-than expectations, a fresh could be triggered in the cable towards 1.3150 levels. 

GBP/USD Technical Levels

Haresh Menghani, Analyst at FXStreet explains, “A move above 1.3250 immediate resistance, is likely to boost the pair towards reclaiming 1.3300 round figure mark before heading towards its recent closing highs resistance near 1.3330-4 region marked by 23.6% Fibonacci retracement level of Brexit-led sharp slide.”

“Meanwhile on the downside, sustained weakness back below 1.3200 handle, and a subsequent selling pressure below 1.3180 level, has the potential to drag the pair back below 1.3100 handle, towards testing a short-term trend-line support near 1.3060-50 region. A convincing break below 1.3060-50 would negate possibilities of any further near-term recovery and trigger a fresh leg of weakness for the pair in the near-term.”