U.K. retail sales in June are expected to have risen by 0.3% following a unexpected 0.6% decline the month prior. May saw sales outside of food stores fall by 1.4% including a 1.9% in textiles. We could see the volatile component rebound in June as Britons geared up for the summer.
[B]Fundamental Outlook[/B]
U.K. retail sales in June are expected to have risen by 0.3% following a unexpected 0.6% decline the month prior. May saw sales outside of food stores fall by 1.4% including a 1.9% in textiles. We could see the volatile component rebound in June as Britons geared up for the summer. The British Retail Consortium showed retail sales rose 3.2% in June, compared to 0.8% in May in their report which could lead to a stronger than expected reading from the office for National Statistics in London. The increase in consumption should raise the outlook for domestic growth which could lend sterling support. This would conflict with the GBP/USD technical outlook which is calling for a near-term bearish momentum. We could se a limited reaction from the release with U.K. GDP due tomorrow, which could support the bearish bias.
[B]Technical Outlook[/B]
A triangle appears to be in its latter stages in the GBPUSD. Triangles consist of 5 waves (a-b-c-d-e) and the rally from 1.5980 would be wave d of the triangle. Favor the downside to at least 1.6260 near term in order to complete the triangle. Such a drop would correlate with a short term decline in the EURUSD.
For More Technical Analysis Visit the Daily Technical Report
[I]To discuss this report contact John Rivera, Currency Analyst: <[email protected]>[/I]
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