GBP/USD May Turn Bullish amid Optimistic Forecast for UK Retail Sales

United Kingdom – Retail Sales

On Thursday, at GMT 8:30 a.m., the UK’s Office for National Statistics will release the month-over-month retail sales figure, which measures the changes in the total value of sales made by the UK’s retail sector over the last month. However, this data is usually adjusted for inflation in order to improve accuracy.

Since retail sales make up a large portion of the UK’ national GDP, binary options traders consider the month-over-month retail sales data to be an important leading indicator of the UK’s economic health.

In July, the UK’s retail sales value decreased by -0.2% and the forecast for August is currently set at a modest growth of 0.4%

United States – Existing Home Sales

Later in the day, at GMT 2:00 p.m., the US National Association of Realtors will release  the existing home sales number, which is the annualized number of residential buildings that were sold during the last month in the country. However, this figure excludes the number newly building constructions.

Since the sale of an existing home usually has a wide-spread positive ripple effect in the local economy, collectively this figure acts as an excellent leading indicator of the overall economic health of the country. Therefore, binary options investors consider the existing home sales number to be an important data as it tends to have a considerable market impact.

Last month, the US existing home sales figure came out at 5.49 million and the forecast for this month is set at 5.45 million.

Trade Recommendation for the GBP/USD

GBP/USD

Since reaching near the 1.5175 level on June 1, the GBP/USD price has been mostly range bound, but managed to form a bullish trend line.

On August 7, the GBP/USD price tested this uptrend line, but the support around the 1.5450 level was strong enough to bounce the price. As a result, it went up to re-test the resistance zone around 1.5675 once again.

Yesterday, the GBP/USD penetrated above the 1.5675 level. However, the price failed to close above this level and retraced back below this by the end of the day. Currently, it is trading near this resistance level.

Given that the forecast for retail sales in the UK is optimistic compared to last month, it would likely create additional bullish momentum in the market.

Under the circumstances, it is recommended that traders consider placing a CALL order for the GBP/USD with their binary options brokers, once the price closes above the 1.5675 level.

Recommended Broker: IQ Option

Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and write on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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