Technical Bias: Bearish
- British Pound continued to move lower against the Swiss Franc, as there is a lot of bearish pressure witnessed on GBPCHF.
- UK retail sales released by the National Statistics posted an increase of 0.1% in July 2015, compared to the preceding month whereas the market was expecting it to gain by 0.4%.
- In terms of the yearly change, the UK retail sales increased by 4.2%, less than the market expected.
- GBPCHF broke an important support area and likely to continue trading lower.
The British Pound continued its slide against the Swiss franc, and traded lower. After a major drop towards 1.5140 there was a flag pattern formed on the hourly chart. The highlighted pattern was breached to open the doors for more losses. Moreover, the disappointing retail sales report also added fuel to the fire and ignited a downside move.
The GBPCHF pair traded as low as 1.5020, and since 1.50 holds a lot of importance, there is a chance of a correction in the near term.
A break below the 1.50 support area might be a warning sign for buyers moving ahead.
UK Retail Sales
Earlier during the London session, the UK retail sales, which measures the total receipts of retail stores was released by the National Statistics. The forecast was lined up for a rise of 0.4% in July 2015, compared to the preceding month. However, the outcome missed the mark, as it increased by 0.1% in July 2015.
Moreover, when we consider the year-over-year change, then the quantity bought in the retail industry managed to post an increase of 4.2% in July 2015, compared with July 2014. The UK core retail sales posted a rise of 0.4% in July 2015, compared to the preceding month. This was in line with the market expectation.
We can attempt a sell trade if the GBPCHF corrects higher in three waves towards the 1.5050-80 area.