Watch GBP/USD on the UK Retail Sales
Skerdian Meta • 1 min read
GBP/USD is back on the uptrend again. In the last two days, this forex pair has gained about 250 pips. I mentioned earlier in the week that this pair was turning bearish. The price action was telling us that; every jump during this month was overwhelmed by sellers, who took us to new lows.
But on Wednesday afternoon, the situation changed and this forex pair reversed back up. That has nothing to do with the GBP though, as the USD is falling through an air pocket at the moment. The market is still short USD.
A sudden bullish turnaround is underway
Although, the picture might change again for GBP/USD. The UK retail sales report is about to be released and that might spark volatility. Last time, retail sales took a dive, posting a 1.5% decline from the previous month.
That was surprising because it represented the December sales, which should have been positive, given the Christmas period. But, they tumbled.
This time, retail sales are expected to grow by 0.5%, but if we get another negative number, then I’m afraid it will weigh on the GBP. It will be the second negative month in a row, which will make the picture gloomy for the UK. Although, don’t marry your trade if you are playing the short side, because the USD is still bearish.