U.K. retail sales are forecasted to have risen by 0.5% in April following a 0.3% gain the month prior as signs that the current recession is ending has started to boost optimism. Consumer confidence jumped from 42 to 50 as record low interest rates and quantitative easing have started to thaw credit markets.
[B]May 21[/B]
[B]U.K.[/B][B] Retail Sales (APR)(GMT 08:30: 05:30 EDT)[/B]
[B][/B]
[B]Expected: 0.5%[/B]
[B][/B]
[B]Previous: 0.3%[/B]
[B]Fundamental Outlook[/B]
U.K. retail sales are forecasted to have risen by 0.5% in April following a 0.3% gain the month prior as signs that the current recession is ending has started to boost optimism. Consumer confidence jumped from 42 to 50 as record low interest rates and quantitative easing have started to thaw credit markets. In turn, housing values are beginning to stabilize which is making it more likely that Britons will start to open their wallets. Last month we saw a 1.5% increase in apparel sales and if demand for household goods -which fell by 2.0% in March- follows suit then a stronger than expected print is possible. An increase in consumption could add to the current bullish sentiment which would conflict with the bearish GBP/USD technical outlook which is proposing a short position as the pair appears oversold.
[B]Technical Outlook
[/B]
GBP/USD
[B]GBP/USD – [/B]After breaking the up and down consolidation of the past several days the market has been in sharp rally mode taking out the 200-Day SMA for the first time since late July 2008. However, any additional gains are seen limited with daily studies now highly overextended after the RSI just crossed above 70.0. Fresh shorts are in play in anticipation of a significant corrective pullback. [B]Position: SHORT @1.5655 FOR A 1.5265 OBJECTIVE, STOP @1.5855. Stops to be trailed to cost on a break back below 1.5605. If 1.5605 not broken, position to be closed out at NY close (5pm NY time) on Wednesday. [/B]
[B]Level[/B]
[B]Resistance[/B]
[B]Details[/B]
1.5885
R3
11/10 high
1.5800
R2
Figure
1.5725
R1
12/17 high
[B]Level[/B]
[B]Support[/B]
[B]Details[/B]
1.5525
S1
5/19 high
1.5450
S2
5/18 low
1.5295
S3
5/19 low