09.12.202512:22 Forex Analysis & Reviews: The Pound Ignores Weak Data

The British pound did not react at all to data from the British Retail Consortium, which showed that even Black Friday discounts were unable to prevent a slowdown in retail sales in the United Kingdom.

The report stated that total retail sales in November rose by only 1.4% year-on-year, below the 12-month average and the weakest figure since May. High sales of household and computer equipment were insufficient to offset weak demand for clothing and footwear.

"Budget anxiety among shoppers meant that the Black Friday month did not deliver the results retailers had hoped for — or those the economy needed," the British Retail Consortium said.

Helen Dickinson, Chief Executive of the British Retail Consortium, also confirmed concerns that speculation about tax increases in the run-up to the budget presented by Chancellor of the Exchequer Rachel Reeves on 26 November harmed the economy. Although Labour ultimately abandoned income-tax hikes, opting instead to freeze thresholds for years ahead, warnings about the dire state of public finances still dampened consumer sentiment during a critical period for retailers.

Many experts also link the slowdown in sales growth to inflation, which remains high and reduces consumers' purchasing power. Consumers are becoming increasingly cautious with their spending, preferring to postpone major purchases until better times.

Weak retail sales are also bad news for Reeves. Her budget strategy relies on consumers — the engine of the British economy — spending their savings and returning to shops and restaurants. According to an assessment by the UK tax authority, if incomes and consumption do not remain stable, Reeves risks creating a £40 billion hole in the public finances.

The BRC data aligns with an NIQ report showing a decline in demand for expensive goods and technology during Black Friday compared with the same period last year.

Separate data from Barclays also showed that spending on the bank's debit and credit cards in November fell by 1.1% year-on-year — the sharpest decline since February 2021. Spending on non-essential goods and services decreased for the first time since July 2024, the report noted.

However, as I mentioned above, the data made no impression on the currency market.

As for the current technical picture of GBP/USD, pound buyers need to reclaim the nearest resistance at 1.3350. Only this will allow a move toward 1.3380, above which a breakout will be rather difficult. The most distant target will be the 1.3415 level. In the event of a decline in the pair, the bears will attempt to regain control over 1.3310. If they succeed, breaking this range will deliver a serious blow to the bulls' positions and push GBP/USD down to the 1.3270 low, with the prospect of reaching 1.3240.

As for the current technical picture of EUR/USD, buyers now need to think about how to reclaim the 1.1650 level. Only this will allow a move toward testing 1.1680. From there, it is possible to climb to 1.1705, but doing so without support from major players will be quite difficult. The most distant target would be the 1.1725 high. In the event of a decline, I expect significant action from large buyers only around 1.1625. If no one appears there, it would be better to wait for a renewal of the 1.1590 low or open long positions from 1.1570.