The GBP/USD price rose in the overnight session as traders reflected on the latest American retail sales and jobless claims numbers. Focus now shifts to the upcoming UK retail sales numbers scheduled for this morning. It is trading at 1.3785, which is slightly above this week’s low of 1.3765.
UK retail sales numbers
The UK has released several important numbers this week. First, on Tuesday, the country published strong jobs numbers that revealed that the unemployment rate declined to 4.6% in July. The economy also added thousands of jobs in three months to July.
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Second, on Wednesday, the UK published strong inflation numbers. The data showed that consumer prices jumped sharply in August. The headline CPI rose to 3.2% because of last year’s Eat Out to Help Out program that handed stiff discounts. Still, the numbers were stronger than the median estimate of 2.9%.
The next key data to come out from the Office of National Statistics (ONS) will be the latest UK retail sales numbers. The data is expected to show that sales jumped in August as the country continued to reopen. Precisely, analysts expect the data to show that the headline CPI rose from 2.5% in July to 2.7% in August. On a month-on-month basis, the CPI is expected to rise from -2.5% to 0.5%.
Meanwhile, the core sales, which excludes the volatile food and energy prices, is expected to rise from -2.4% to 0.8% and from 1.8% to 2.5%. These numbers are expected to show that the UK economy is doing well.
The GBP/USD is also reacting to the recent data from the US. On Thursday, the numbers revealed that the country’s retail sales defied high prices and supply shortages to rise. The total retail sales rose from -1.8% to 0.7% while core sales rose from -1.0% to 1.8%.
GBP/USD forecast
The four-hour chart shows that the GBP/USD pair rose slightly during the overnight session. It is trading at 1.3785, which is slightly below the 25-day and 50-day moving averages. The price is also slightly below the double-top pattern at 1.3900. In price action analysis, a double-top pattern is usually a bearish sign.
It is also slightly above the ascending trendline shown in red while the MACD has been on a downward trend. Therefore, the pair will likely break out lower as bears target the key support at 1.3700.
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