GBP/USD: Sterling pressured by weak UK retail sales data
- The GBP/USD declined slightly after the weak UK retail sales data.
- The overall retail sales declined 3.7% in February year-on-year.
- It will react to the US personal spending and income data.
The GBP/USD price declined after the relatively weak UK retail sales data released on Friday. It is trading at 1.3758, which is 0.70% above this week’s low of 1.3670.
UK retail sales numbers
This week, the Office of National Statistics (ONS) has published several important economic numbers from the UK.
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On Tuesday, the statistics agency delivered the relatively strong UK employment numbers that revealed that the overall unemployment rate dropped to 5.0% in January. This was a better performance considering that the country implemented a national lockdown during the month.
On Wednesday, the agency published weak UK inflation data. The country’s headline and core CPI declined slightly mostly because of the weak clothing and automobile prices.
And on Friday, the agency published the relatively weak UK retail sales numbers. In total, the overall retail sales rose by 2.1% in February after falling by 8.2% in January. This increase led to an annualised decline of 3.7%, which was worse than the median estimate of 3.5%.
At the same time, core retail sales rose by 2.4% after falling by 8.8% in January. They fell by 1.1% on a year-on-year basis.
The slight improvement was because of non-food stores, whose volume rose by 16.2% while clothing retailers recorded a 50.4% slump. With the country being in lockdown, clothing prices had to drop because of weak demand.
This will likely change as the government starts to wind down the lockdown later this year. Most importantly, online sales proportion increased to 36.1%, the highest point on record.
Later on Friday, the GBP/USD will react to the latest personal spending and income data from the US. Economists expect the data to show that the personal income fell by 7.3% in February as spending fell by 0.7%.
GBP/USD technical forecast
The GBP/USD price declined slightly after the latest UK retail sales numbers. On the three-hour chart, the pair remains slightly below the important resistance level at 1.3780, which was the lowest level on March 5. The Awesome Oscillator remains above the neutral level while the price is slightly above the moving averages. You can check out our free forex trading course for details about how to use these indicators. Therefore, in my view, after forming a double bottom at 1.3670, there is a possibility that the pair will keep rising,