Gbp falls despite rise in UK retail sales as market eyes FOMC minutes release

GBPUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.33%	-43 Pips
Week to-date	-0.29%	-37.9 Pips
October	-2.17%	-289.6 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD FOMC Meeting Minutes

What happened lately

In the United Kingdom, the British Retail Consortium (BRC) reported that Like-For-Like Retail Sales over a 12-month period saw an increase to 1.7% in September from 0.8% in August. This marks a significant uptick in consumer spending, indicating a potential recovery or growth in retail activities within the UK. The rise in retail sales suggests that consumer confidence might be improving, potentially driven by factors such as better employment figures, wage increases, or a change in consumer sentiment towards spending. Such data can positively impact the overall economic outlook for the UK, as retail sales are a critical component of economic activity. However, it is essential to examine whether this trend persists over subsequent months to confirm a secure economic recovery in the retail sector.

Regarding the GBPUSD currency pair, the effect of this economic news on the exchange rate can be multi-faceted. The increase in U.K. retail sales reflects positively on the British economy, potentially strengthening the GBP due to perceived economic growth. However, market participants may also weigh this against other global economic factors and geopolitical developments. On Monday, the GBPUSD pair dropped by -0.33% to 1.30848. It indicates that despite the positive retail sales data, other influences might be impacting the currency value, such as investor concerns over broader economic conditions or upcoming significant events. One such event is the release of the FOMC Meeting Minutes scheduled for Wednesday at 7:00 PM. This event is of high impact and involves the US Federal Open Market Committee’s discussions, which can sway financial markets by providing insights into future US monetary policy. As traders anticipate this data release, it could induce volatility in the GBPUSD pair. The anticipation or outcome of such an event can lead to repositioning by investors, which could either bolster or pressure the currency values further.

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What can we expect from GBPUSD today?

GBPUSD on Monday dropped -0.33% to 1.30848. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for GBPUSD looks bearish as the pair posted lower in Monday trading session.

Looking ahead for the day, immediate support level is at S1 1.3051 with break below could see further selling pressure towards S2 at 1.30173. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 1.31343 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 1.30589 would indicate selling pressure.

For the week to-date, take note that GBPUSD is mixed as compared to the prior week.

Key levels to watch out:

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