Global macro overview for 19/02/2016:
The UK retail sales data has crushed the market expectations today. The better-than-expected numbers surprised market participants. Retail sales including auto fuel came in at the level of 2.3% m/m; (5.2% y/y) vs. 0.8% m/m; (3.6% y/y) and -1.4% m/m; (2.3% y/y) prior. Average store prices dropped 2.6% and January is usually a month of big sales, so that could be the main reason why sales were so high. In conclusion, the UK customers are doing great amid the talks of a possible Brexit, so the overall sentiment is still positive.
Let's now take a look at the GBP/USD technical picture following the data release. After breaking the golden trend-line support, the pair tested it several times and now both sides, bulls and bears, are fighting to regain the control over the market. Any new lower low would mean bears are in control and the test of the support at the level of 1.4150 might be expected. On the other hand, any breakout above the level of 1.4400 would enable bulls to regain control and then the test of the dark brown line should be expected soon.
