British retail sales dropped markedly in June after two consecutive months of growth, official figures from the Office for National Statistics (ONS) showed on Thursday. The volume of retail sales declined 0.9% month-over-month on a seasonally adjusted basis in June after rising 0.9% in May, while market analysts anticipated a decrease of 0.4%. Compared with a year earlier, last month's sales grew 4.3%, following May's downwardly revised reading of 5.7% and falling behind analysts' expectations of a 5.0% rise. The June deceleration was mainly driven by lower sales of clothing and footwear which dropped 1.8% on a monthly basis and 6.1% on an annual basis. The adverse weather was seen as the main contributor to the following fall, as most of the data was collected before the June 23 EU referendum. Excluding auto fuel, retail sales declined 0.9% moth-over-month, although climbed 3.9% year-over-year in the reported month.
Separate data from the ONS showed that UK public sector net borrowing dropped to 7.31 billion pounds in June from the previous month's upwardly revised reading of 9.41 billion, whereas economists predicted an increase to 9.20 billion.
UK Manufacturing and Services PMI, as well as US Manufacturing PMI to be today's market movers
GBP/USD attempts to remain above 1.32
The GBP/USD currency pair remained relatively unchanged yesterday, having inched only 24 pips higher, amid mixed UK fundamental data results. However, the Cable opened on top a relatively strong support, represented by the 20-day SMA and the weekly PP, which should keep the Pound elevated. Even with better-than-expected fundamentals today, the UK currency is unlikely to climb over the 1.34 major level, leaving the immediate resistance around 1.3485 intact. On the other hand, we should not rule out the possibility of the bearish development prevailing, due to technical indicators in the daily timeframe giving bearish signals. The key bottom target is the 1.31 psychological level.
Daily chart
Hourly chart
Bulls remain in control
Today 58% of all open positions are long, compared to 57% yesterday. Meanwhile, the share of sell orders dropped from 69 to 53%.
Compared to Thursday, there are slightly less bulls at OANDA - they take up 53% of the positions open with the Canada-based broker. Sentiment at Saxo Bank remains somewhat neutral, as here the number of bears exceeds the number of bulls by only 2 percentage points.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.36 in three months
More than half of traders (61%) believe the British currency is to cost 1.36 or less dollars after a three-month period. The most popular price intervals was selected by only 18% of the voters, namely the 1.28-1.30 one, while the second most popular choice implies that the Sterling is to cost between 1.24 and 1.26 dollars in three months, chosen by 16% of the surveyed. At the same time, the mean forecast for Oct 22 is 1.3341.