GBP/USD is trading sideways as investors shift their focus to the UK retail sales data. Analysts expect June’s retail sales to have risen by 0.4% MoM after declining by 1.4% in the previous month. With the exclusion of the volatile food and energy components, the forecasted core retail sales figure of 0.6% MoM is higher than the prior reading of -2.1%. Higher-than-expected figures are likely to boost the currency pair.
GBP/USD will also be reacting to the preliminary PMI data from the UK and US. UK’s manufacturing PMI has been forecasted at 62.7, which is lower than the prior 63.9. In the US, the expected manufacturing PMI reading of 62.0 is a point lower than the previous 62.1.
GBPUSD technical outlook
GBP/USD is on a consolidation pattern as investors await the UK retail sales data. After hitting a 6-month low of 1.3571 on Tuesday, it has surged to erase losses from earlier in the week. At the time of writing, it was down by 0.06% at 1.3760. On a two-hour chart, it is above the 25 and 50-day EMAs.
Higher-than-expected UK retail sales are likely to push the currency pair past the crucial resistance level of 1.3800. If that happens, the levels to watch out for will be 1.3859 and the psychological level of 1.3900. On the flip side, GBP/USD is likely to continue finding support at 1.3725. Below that level, the bears will be targeting 1.3700.