On Thursday, before 9:30 am, the trend of GBP/USD pair had been a well established bearish trend. And then at 9:30 the data from UK about the retail sales of February was released. Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
The strength of this data was a clear signal for the markets to immediately respond in favour of GBP. The pair shot up in a steep reversal of the trend that had prevailed before. The traders jumped into the opportunity . Posts about the success of that day’s buy positions were seen all over the social trading platforms like eToro. On the same day, the mixed data from US did not change things much.
However, on Friday, the data from US about GDP was released. Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.
The upward reversal of the pair’s trend was somewhat neutralised, but it was not as much as one would expect given the importance of GDP in measuring the overall strength of an economy. But this lack of response from USD is understood because Friday was a holiday for most of the major markets.
What to expect when the market opens?
It can be expected that when the market opens the USD will show its response and the pair can show a downward movement.
