Global macro overview for 19/08/2016:
According to UK Office for National Statistics, the retail sales data for July were better than the market expectations. The volume of sales increased 1.4% on a monthly seasonally adjusted basis in July, whereas market participants had expected only a 0.1% rise after -0.9% decline in June. Moreover, on a yearly basis, retail sales jumped 5.9% in the same month, following June's 4.3% rise and surpassing the 4.1% market forecast. The data covered four-week period from July 3 to 30 after the United Kingdom voted to leave the European Union. In conclusion, the UK released the solid data after the Brexit vote, but did they really appear due to enormous economic improvement after Brexit or are they a simple result of a dramatic weakening of the pound? The answer seems to be obvious here.
Let's now take a look at the EUR/GBP technical picture in the daily time frame. The consecutive series of higher highs and higher lows is still in place, but the recent bearish divergence between the price and the momentum oscillator indicates a corrective move to the downside. The next support is seen at the level of 0.8341.
