FX.co ★ Global macro overview for 22/07/2016

Global macro overview for 22/07/2016:

After two consecutive months of growth, British retail sales dropped significantly in June. The Office for National Statistics (ONS) revealed yesterday that retail sales declined 0.9% on a monthly basis, while market analysts had anticipated a decrease of 0.4%. On a yearly basis, retail sales dropped 4.3% from a year earlier, and this number looks even worse if we compare it with the 5.7% y/y advance in May. It fell behind analysts' expectations of a 5.0% rise. The main factor behind the June retail sales deterioration is a drop in sales of footwear and clothing by 1.8% m/m and 6.1% y/y. In conclusion, British consumers might be simply tightening the belt after Brexit, and it might have a bad influence on the next quarter GDP.

Let's now take a look at the technical picture of GBP/USD on the daily time frame. The most important resistance at the level of 1.3537 hasn't been violated, and now the market has dropped into the congestion zone between this level and technical support at the level of 1.3067. The higher time frame trend is still bearish, and so far there are no signs of any trend reversal yet.