By TraderVox.com
The indicator has been providing important perspective on consumer confidence and spending. If the indicator has a strong reading, this is considered significant for economic growth in the country. The UK Retail Sales was higher than the market expectation in June when it jumped to 1.4 percent. This month, the indicator is expected to increase by 0.6 percent.
There are general bearish sentiments in the UK as major sectors in the country have been contracting. Despite, the recent pound rally last week, the general trend of the pound-dollar pair has been bearish since July. Significant sectors in the economy such as the housing, construction, and manufacturing have been contracting as crisis in Europe continues to take toll on the UK economy. Moreover, the bleak global economic outlook has forced investors to favor the safe haven provided by the dollar and the yen, as such, the GBP/USD pair outlook remains bearish.
When this report is announced, some of the technical levels to keep in mind include: 1.5930, 1.5805, 1.5750, 1.5648, 1.56, and 1.5521. If this indicator comes within the market expectations, –that is 0.3 -0.9 percent, then the pair is expected to rise within range with a slim chance of breaking higher. If it comes above expectations (1.0-1.3 percent) the pair might break one resistance line. However, if the indicator comes in well above the market expectations, the GBP/USD cross is expected to break a second resistance line.
On the other hand, if the indicator is below the market expectation –that is a reading between -0.1 and 0.2 percent, the cross may move downwards with a possibility of breaking below one support level. A well below expectation reading will probably cause the pair to break a second support level.
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