The volume of retail sales in the UK rose by 1.7%, far better than expected. It was predicted to advance by 0.5% in February after a disappointing drop of 1.5% in January (now revised lower to -2%). Year over year, retail sales rose 3.7%, better than 2.5% expected.
GBP/USD was sliding from the highs, trading around 1.6560 before the release and leap[s immediately afterwards to 1.6633. The move is still on.
With this move, Pound/dollar breaks resistance at 1.6618. Here is how it looks in the chart:
Core retail sales (without fuel) also surprised to the upside with a jump of 1.8% instead of 0.3% expected. Year over year, core sales are 4.2% higher, better than 2.8% forecast.
So far, this trading week has been characterized by a recovery for sterling. Cable managed to move out of the low levels below 1.65 and even challenge the 1.66 level. Inflation dropped to 1.7% as expected with other components stabilizing. This came after a few lower than expected CPI reads.
A final read of GDP for Q4 2013 and and the current account for the same quarter still await the pound.
Support is seen at 1.6550, followed by 1.6480. Resistance awaits at 1.6618. For more, see the GBP to USD forecast.
