UK retail sales dip slightly in August
This morning's spending figures in the UK have revealed a small dip in retail sales in August, with the headline number down 0.2% on the month, while ex-fuel spending fell by 0.3%. In both cases, forecasts were for a flat month, though the summer readings can be a mixed bag due to the holiday season. That said, we can also see tourism adding positively to the data, though clearly, not this time around.
In line with the familiar reaction to data, Brexit matters are front and centre for GBP traders at the moment, and there is a clear sense that due to the opposition to a no-deal exit at the end of October, we may well see an extension which in turn could lead to a general election. This, in turn, would be a de facto second referendum, so the probability dynamics have worked in favour of GBP as we have seen in recent sessions.
Cable is looking very well supported and even though we are coming up against continuous resistance either side of 1.2500, the dips are being paid up and the market is not giving up on the upside.
Similarly, in EUR/GBP, we are struggling for upside traction as sellers keep coming in on any move higher. Consequently, we are facing somewhat of a stalemate here, as buyers are containing the downside ahead of 0.8800 for now. 0.8850 is acting as a near term pivot as a result.