Filed Under:
Forex pairs in this Article » GBP/USD
FXstreet.com (Athens) – The GBP/USD got a solid support after the UK retail sales were announced at very encouraging levels and coupled with yesterday’s encouraging labor data led the cross to its daily highs as of 1.6088.

GBP/USD spikes as sterling boosts on retail sales; traders puzzled at solid UK data without wage growth

The cable managed to touch its daily high as of 1.6088, as soon as the UK retail sales data revealed that retail sales in the UK jumped immensely both in aspects of a yearly level, as well as on monthly basis. Briefly, the year-over-year UK Retail Sales grew 2.2% in September, compared with the 2.1% increase in August and slightly above forecasts of +2.1%. What’s more, annual retail Sales excluding fuel increased 2.8%, up from the 2.3% rise and above market consensus of 2.1% growth. Finally, month-over-month Retail Sales excluding Fuel edged up 0.7%, following a 0.8% decrease and exceeding expectations of +0.3%. All in all, market participants might get really puzzled on the fact that the both yesterday’s UK labor data, as well today’s retail sales data released at great levels, but without any wage growth. Traders should read between the lines to realize that consumption in the UK can’t be sustained without a minimum – at least – growth wage.

Technical Aspects on GBP/USD

Axel Rudolph, Head Technical Analyst at Commerzbank suggests that the GBP/USD unexpectedly bounced back on Wednesday. Despite this advance we will remain bearish as long as GBP/USD stays below the 1.6123 October 8 high. A drop through the past week’s support level at 1.5916 will confirm our bearish outlook. Failure there will target the 38.2% Fibonacci retracement of the July-to-October advance at 1.5707 and possibly 1.5536, the 50% retracement.”
comments powered by Disqus
Trading Center