At first glance, it is extremely surprising that the market did not react in any way to the data on the labor market in the United Kingdom, even though the unemployment rate fell from 4.8% to 4.7%, and employment increased by 95 thousand. The employment data turned out to be better than forecasts. However, it is important to pay attention to the change in the number of applications for unemployment benefits, which decreased by 7.8 thousand, with a forecast of 180.0 thousand. Here, it is extremely important to know the data on applications for July, the unemployment rate for June, and the employment in May. It turns out that in the best case, in the near future, the unemployment rate will remain unchanged if it does not grow at all. It was this fact that leveled all the positive values from the unemployment rate and employment.
Unemployment rate (UK):
Meanwhile, American statistics may lead to a noticeable weakening of the dollar. And this is all because of retail sales, the growth rate of which may slow down from 18.0% to 11.5%. However, the annual data themselves are still not informative due to the persisting low base effect. So much more interesting is the monthly data, which should show a decline in retail sales of -0.3%. It turns out that the American economy is actually not recovering as steadily as expected. Data on industrial production may mitigate the negative impact, although on an annualized basis, its growth rate should slow down from 9.8% to 7.2%. But again, the whole point here is in the notorious effect of a low base, since in monthly terms the industry can grow by 0.3%. However, retail sales carry much more weight, and they will determine the sentiment of market participants. Industrial production will only make small adjustments.
Retail Sales (United States):
For the fifth day in a row, the GBP/USD currency pair follows the trajectory of the sideways amplitude 1.3800 / 1.3885, consistently working out the set boundaries. Speculative interest takes place in the market based on a number of impulse candles during the period of price movement in a range.
Considering the trading chart on a daily scale, there is an attempt to restore the downward interest. The area of psychological value 1.4000 serves as the resistance level.
Expectations and prospects:
Lateral amplitude is still relevant among market participants, therefore, work on a rebound, as well as a breakdown relative to one or another border of the range, is considered the most appropriate strategy.
In the case of a breakout strategy, the coordinates 1.3785 will be considered, with a downward price development, as well as 1.3900, with an upward move.
Comprehensive indicator analysis signals a sell in the short-term and intraday periods, due to the return of the price to the area of the lower border of the range.
