The British pound has posted considerable gains for a second consecutive day. Currently, GBP/USD is trading at 1.3767, up 0.37% on the day. It has been a volatile week for the pair, which declined by 1% early in the week but has recovered these losses.
Markets eye UK Retail Sales, PMIs
It may not qualify as a data dump, but with three key UK events on Friday, investors will finally have some data to digest in what has been a very light calendar week.
The UK releases retail sales for June (6:00 GMT). The May report was a disappointment, as the headline reading came in at -1.4% and core retail sales at -2.1%. June data should be stronger, with retail sales expected at 0.4% MoM and 9.6% YoY. The consensus for core retail sales is 0.6% (MoM) and 8.2% YoY. The annualized estimates are still at high levels, since they are in comparison to data from July 2020, at the height of the Covid pandemic.
This will be followed by the Manufacturing and Services PMIs (8:30 GMT). The July readings are expected to ease slightly from June, but still point to strong expansion (62.3 for Manufacturing, 62.1 for Services).
Will the pound continue to show volatility on Friday? Investors will be especially attuned to the retail sales release. If the MoM readings fall short of the forecast, this would mark a second straight decline, and investors could give the pound a thumbs down. Conversely, a reading above expectations would likely give the pound a lift and extend the current rally.
It has also been a very light calendar week in the US. On Friday, the US releases PMIs for July, which have shown strong growth as the economy fires on all cylinders. In June Manufacturing PMI came in at 62.1 and Services PMI at 64.6, with little change expected in the upcoming release.
GBP/USD Technical Analysis
- There is resistance at 1.3863. Above, there is resistance at 1.3961
- On the downside, 1.3714 is the first line of support. This is followed by support at 1.3663
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/
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