GBPUSD Extends Winning Streak to a Sixth Day; Can UK Retail Sales Help Fuel Its Rally?

GBPUSD
GBPUSD

GBPUSD has enjoyed a bullish run in the past few trading days. The currency pair has finished higher every day since July 17. As of this writing, it is trading at its highest level since June 11. Can the UK retail sales report help push GBPUSD to new monthly highs?

Due at 7:00 am GMT later today, the UK retail sales report for June is expected to show an 8.3% uptick. A better-than-expected figure could be bullish for GBPUSD because it would suggest that consumer spending in the UK is recovering from the coronavirus pandemic. On the other hand, a disappointing figure could weigh on the currency pair because it would suggest that consumers are still not confident about spending. In turn, it may translate to lower economic growth.

Technical Analysis

On the 4-hour time frame, it can be seen that GBPUSD has recently been consolidating with an upward slope. When you enroll in our free forex trading course, you will learn that this is widely considered as a resign wedge chart pattern. It is interpreted as a bearish reversal signal. This means that a strong close below yesterday’s low at 1.2672 could equate to a downside break. Consequently, GBPUSD may fall to 1.2644 where it could test a confluence of support. This price coincides with the rising trendline (from connecting the lows of June 30 and July 17).

On the other hand, a strong bullish close above today’s Asian session highs at 1.2772 could indicate that there are still buyers left in the market. GBPUSD could soon then trade higher to 1.2812 where it peaked on June 10.

GBPUSD, 4-Hour Chart

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