According to the latest economic figures, Britain's retail sales went down last month, meaning that country is facing a lot of challenges following the vote to leave the EU. The British Retail Consortium-KPMG Retail Sales Monitor – market-leading insights tool for retailers, which provides an instant snap shot of industry performance – plunged 0.5% in the 12 months through June following a 0.5% expansion the previous month. The following data diminished for the third consecutive month in June.
Meanwhile, Britain's retailers still remain open for new businesses. The outcome from the EU referendum vote has not changed their stabile willingness of delivering for customers day in, day out or their investment in order to make people's shopping process as much comfortable as it could be, being inspired by digital and technology. Moreover, despite the harsh plunge in the pound, the time it takes for input price increases to conversion into higher shop prices will depend on a combination of different factors including further changes in the pound, commodity prices and the overall political situation.
Another quiet day today
GBP/USD struggles to post more gains
On Monday the GBP/USD currency pair recovered from its intraday low and edged higher, barely managing to climb over the 1.30 major level, but unable to pierce the immediate resistance in face of the weekly PP. The Cable is expected to continue making its way up ever since it put the 1.29 mark to the test, ignoring the nearest resistance, with the next target being the weekly R1 at 1.3267. Technical studies, on the other hand, suggest the Pound is to fall back down, in which case the psychological 1.29 mark is likely to provide support. Sharper losses are to be limited by the demand level at 1.2724, but a drop that low is unlikely to occur today.
Daily chart
Hourly chart
Bulls remain in control
Today 64% of traders are long the Sterling, but the portion of sell orders increased significantly, namely from 58 to 74%.
Compared to Wednesday, there are slightly less bulls at OANDA - they take up 56% of the positions open with the Canada-based broker. Sentiment at Saxo Bank grew stronger, as here the number of bulls exceeds the number of bears by 4 percentage points.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.40 in three months
More than half of traders (59%) believe the British currency is to cost 1.40 or less dollars after a three-month period. The most popular price intervals was selected by only 14% of the voters, namely the 1.28-1.30 one, while the second most popular choice implies that the Sterling is to cost either between 1.24 and 1.26, or between 1.36 and 1.38, or 1.40 and 1.42 or even between 1.42 and 1.44 dollars in three months, all four chosen by 10% of the surveyed. At the same time, the mean forecast for Oct 12 is 1.3736.