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The U.K. is printing its retail sales numbers today!

Will the release give another reason for pound bears to attack?

Before we check out Cable’s setup, take a look at the major headlines that Asian session traders priced in:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • Germany’s PPI at 6:00 am GMT
  • U.K.’s retail sales at 6:00 am GMT
  • Eurozone’s current account at 8:00 am GMT
  • Canada’s retail sales data at 12:30 pm GMT

What to Watch: GBP/USD

GBP/USD 1-hour Forex Chart
GBP/USD 1-hour Forex Chart

GBP/USD is about 40 pips away from the big 1.3000 psychological handle that had served as support in July and August and a resistance a few days ago.

Pound bears may be gearing up for another trip to Cable’s September lows with today’s U.K. retail sales release. Headline retail trading is expected to slow down from 3.6% to 0.5% in August, while core retail sales could also slow down from 2.0% to 0.3% for the month.

Weaker than expected retail activity would mean that the economy already has a steep hill to climb even before highly likely events such as a no-deal Brexit and a second lockdown take their toll. It would support the Bank of England (BOE)’s willingness to talk negative interest rates and likely drag the pound lower.

Surprisingly strong numbers, on the other hand, could encourage retracements from GBP’s intraweek losses. The pound could take its cues from the high-yielding comdolls and gain some pips against the safe-haven dollar.

If a strong U.K. retail sales report or a wave of risk-taking pushes GBP/USD firmly above 1.3000, then pound bulls can look at the 1.3060 previous area of interest as a potential profit target.