GBP/USD rebounded from the 50-day moving average on Wednesday, although the uptick ran out of steam in Asia at a high of 1.3228.
Currently, the spot is trading at 1.32 levels and the 50-day moving average is located at 1.3156.
UK retail sales are due at 08:30 GMT
Retail sales are seen falling 0.1% m/m in September. The annualized growth is seen slowing to 2.1 percent from 2.4 percent. Core retail sales (ex fuel) growth is likely to have slowed to 0.1 percent m/m and 2.4 percent y/y.
Retail sales could beat estimates, lead indicators say
Figures from the British Retail Consortium (BRC) and KPMG showed that showed that like-for-like retail sales rose 1.9 percent last month, compared to a 0.4 percent rise a year earlier. Total sales rose 2.3%, while online sales surged 10.7% in September.
Thus, odds are high that the official retail sales data due today could print higher than expected (slowdown could be much less than estimates).
A better-than-expected UK retail sales figure could lift the GBP/USD to 1.3268 (38.2% Fib R of Sep. 20 high - Oct. 6 low). However, the sustainability of the gains depends on the outcome of the Brexit summit.
May under pressure to make 'deal or no deal' ultimatum
As per The Telegraph report, four former Cabinet ministers, as well as MPs, business leaders and academics have urged PM Theresa May to walk away from the EU and stop negotiations if European leaders do not agree to trade talks at a crucial summit on Thursday evening.
While a 'no deal' scenario could be disastrous for both sides, the first to take a hit could be the British Pound. On the other hand, a positive outcome of the summit could push the Pound higher even if the retail sales fall more than expected.
GBP/USD Technical Outlook
On the downside, support is lined up at 1.3170 (trend line sloping upwards from Mar. 14 low and Jun. 21 low) and 1.3156 (50-day MA). A violation there would open up downside towards 1.3043 (100-day MA). On the higher side, a break above 1.3222 (Oct. 3 low) could yield 1.33 (zero levels) and 1.3338 (Oct. 13 high).
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