When are the UK Retail Sales and how could they affect GBP/USD?

The UK Retail Sales Overview

The United Kingdom (UK) docket has the Retail Sales data to be released by the Office for National Statistics (ONS) on Friday, later this session at 06:00 GMT.

UK Retail Sales are expected to increase by 0.4% month-over-month (MoM) in August, compared to a 0.6% increase seen in July. On an annualized basis, Retail Sales are seen rising 0.6% during the reported month, down from 1.1% prior.

Core Retail Sales, stripping the basket of motor fuel sales, are anticipated to have climbed by 0.3% MoM and by 0.8% year-over-year (YoY), lower than the previous readings of 0.5% and 1.3%, respectively.

How could the UK Retail Sales affect GBP/USD?

Upcoming UK Retail Sales data could weigh on the GBP/USD pair amid signs of softer consumer spending. The Pound Sterling is already facing challenges after the Bank of England (BoE) decided to keep interest rates steady at 4%, as expected, with a 7-2 majority.

The GBP/USD pair holds ground near 1.3550 after registering more than 0.5% losses in the previous session. However, the pair may further depreciate as the US Dollar (USD) remains stronger after the Federal Reserve (Fed) delivered an expected rate cut on Wednesday but signaled no rush to lower borrowing costs quickly in the coming months.

Technically, the GBP/USD pair may target the initial barrier at the nine-day Exponential Moving Average (EMA) of 1.3567. A break above this level could improve the short-term price momentum and support the pair to explore the region around the two-month high at 1.3726. On the downside, the primary support lies at the psychological level of 1.3500, aligned with the 50-day EMA of 1.3496.