Global macro overview for 21/10/2016:
Britain's retail sector data released yesterday were worse than expected. Market participants had expected a 0.3% increase in retail sales from 0.0% a month ago, but there was no increase at all this month. Moreover, on a yearly basis the retail sales increased only 4.1% compared to a 6.6% advance in August and analysts' expectations for a 4.9% gain. Meanwhile, clothing and footwear sales lost 2.8% after prices skyrocketed 5.2%, showing the biggest jump in six years. It is worth to note, that the UK enjoyed one of the warmest Septembers on record, thus people was not obliged to buy autumn clothes. In conclusion, the data suggest the economy is still influenced by consumer spending, which might be overall beneficial as retail sales contribute 0.1% to gross domestic product in the third quarter.
Let's now take a look at the GBP/USD technical picture at the intraday time frame. The price action looks clearly range-bounded as no important support/resistance level has been violated yet and the market is wobbling around all hourly moving averages.The next support is seen at the level of 1.2208 and the next resistnace is seen at the level of 1.2333.
