There has been increasing speculation over the future of interest rates of world central banks, including the Bank of England. Today, several important macro releases will come in. They may shape market sentiment. Thus, the United Kingdom will deliver its retail sales report.
A slump in retail sales in the United Kingdom accelerated to -5.8% from -5.7%. Meanwhile, the market had forecast a 4.4% fall. Anyway, the figures turned out worse than expected, reflecting a decrease in consumer spending, the locomotive of economic growth. If recently posted data gave hope that the British economy could miraculously avoid a recession, all hope faded with the release of the retail sales report.
The pound sterling clearly reacted with a fall, and the euro followed suit. It seems that the currencies will close this trading week on a pessimistic note. Moreover, there will be no more macro reports until Tuesday. This means that market players will have to find something else to focus on – political factors, to be more exact. Unfortunately, they are difficult to predict.
According to the chart of EUR/USD, the pair has been trading sideways for five trading days. This price movement indicates an accumulation stage. Otherwise, a correction that has been brewing since the beginning of the trading week would have occurred.
Judging by this price movement, we may assume that a flat market is at its final stage, which may soon trigger new price swings.
A breakout through one or the other limit of the sideways range will show where the quote may go next.
The pair is likely to go south if it settles below 1.0770 on the 4-hour chart with a fully-fledged correction occurring afterward.
Alternatively, the quote may go further north in case of consolidation above 1.0880 on the 4-hour chart.
The GBP/USD pair pulled back from the December swing high, briefly touched the level of 1.2300, and redounded. This price swing illustrates that market sentiment is still bullish.
The uptrend will go on should the price stay firm above 1.2450 on the 4-hour time frame at least.
Otherways, the pair may trade sideways in the range between 1.2300 and 1.2440.

00:00 Introduction
00:23 Changes in UK retail sales
00:57 Pound and Euro movement
01:26 EUR/USD
02:22 GBP/USD
02:52 Conclusion

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