GBPUSD has been finding resistance at the 100 weekly SMA, which stopped the upward momentum again this month, forming a bearish reversing chart pattern. Earlier today we had a round of economic data from the UK, including the Manufacturing and Services PMI numbers for June, as well as the Retail Sales report for May, but they chart setup remains unchanged.

GBP/USD has been on a strong upward trend for the past two months. However, recent developments have changed its course, leading to the formation of a bearish reversing chart pattern on the weekly timeframe. Following the hawkish FOMC meeting last week which sounded more hawkish than expected, and the BOE yesterday which gave a few dovish signals for the first time, the bearish reversing pattern is taking up shape.

UK May Retail Sales Released by ONS – 21 June 2024

• Monthly Retail Sales:

  • Actual: +2.9%
  • Expected: +1.5%
  • Prior: -2.3% (revised to -1.8%)

• Yearly Retail Sales:

  • Actual: +1.3%
  • Expected: -0.9%
  • Prior: -2.7% (revised to -2.3%)

• Retail Sales (excluding autos and fuel):

  • Monthly:
    • Actual: +2.9%
    • Expected: +1.3%
    • Prior: -2.0% (revised to -1.4%)
  • Yearly:
    • Actual: +1.2%
    • Expected: -0.8%
    • Prior: -3.0% (revised to -2.5%)

UK retail sales have finally surpassed expectations after being weak for a long time. While this is a significant achievement, it comes at a time when its impact on the Bank of England’s (BOE) forthcoming policy decisions is likely to be minimal. The Office for National Statistics (ONS) has also highlighted that the year-over-year comparisons should be viewed with caution due to the additional holiday at this time last year.

Examining the data more closely, there were increases in retail sales volumes across all major sectors. Food shop sales experienced a 1.2% rise, department store sales climbed by 1.7%, and sales at textile, clothing, and footwear stores saw a substantial increase of 5.4% over the month. These improvements indicate a widespread recovery in consumer spending across various retail categories, reflecting a more robust demand environment.

GBP/USD Live Chart