Henry Liu
Former FPA Special Consultant
- Messages
- 473
We'll be getting the Retail Sales figure out of New Zealand today, since Retail Sales is a direct reflection of the economy, this release is considered as an high impact release... Here's the forecast:
6:45pm (NY Time) NZ Retail Sales Forecast 0.6% Previous -0.3%
ACTION: NZD/USD BUY 1.2% SELL 0.0%
The Basic Plan
Retail Sales release is the measurement of consumer spending in the retail sector, as it reflects the strength of the economy and the strength of consumer spending. We’ll be looking for a difference (or deviation) of at least 0.6% from the Forecasted number, therefore a positive 1.2% (or better) will be somewhat bullish signal for NZD and a 0.0% (or worse) will be a bearish signal for NZD. Our focus will be on the Headline release, not on the Core Release... However both releases shouldn't conflict, or it will be an automatic no trade.
We’ll look for entries after the release in the direction of the signal, provided that the market shows initial confirmation in the direction of the release first, coupled with a decent retracement for proper risk to reward ratio, then we’ll make our entry. For more information on my trading, please read my trading methods.
The Market
RBNZ has started its rate tightening cycle and NZD is on a somewhat bullish trend. It is expected to see NZD react to risk sentiment on a daily basis, but my money is on a gradual and steady upmove for the NZD until RBNZ decides to pause rate hikes.
It is also important to point out that fundamental outlook and economic indicators, such as the Retail Sales figure, does not have much effect on NZD as this currency follows risk sentiment and correlates strongly with global equity market (and commodities, of course).
More Thoughts
As this is a very slow moving currency, patience is definitely a required for a successful trade. With last week's exaggerated gains on NZD, we could see some pullback on a worse than expected release, therefore I'd be looking to sell from the top... However, if the opposite is true, expect some limited up move as I think NZD appreciation should be limited.
Due to the release time of this news, there will be less liquidity than normal. I suggest that unless we get our tradable deviation, staying out of this release is a must.
DEFINITION
“Measures the value of sales at the retail level. A rising trend has a positive effect on the nation’s currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises.”
For previous releases data of NZD Retail Sales and historical charts, click below:
NZ Retail Sales & Historical Charts
To see the actual charts, make sure you click on the "File Box" next to the news item on the right hand side. Historical chart should pop up in a new window.
Thanks,
6:45pm (NY Time) NZ Retail Sales Forecast 0.6% Previous -0.3%
ACTION: NZD/USD BUY 1.2% SELL 0.0%
The Basic Plan
Retail Sales release is the measurement of consumer spending in the retail sector, as it reflects the strength of the economy and the strength of consumer spending. We’ll be looking for a difference (or deviation) of at least 0.6% from the Forecasted number, therefore a positive 1.2% (or better) will be somewhat bullish signal for NZD and a 0.0% (or worse) will be a bearish signal for NZD. Our focus will be on the Headline release, not on the Core Release... However both releases shouldn't conflict, or it will be an automatic no trade.
We’ll look for entries after the release in the direction of the signal, provided that the market shows initial confirmation in the direction of the release first, coupled with a decent retracement for proper risk to reward ratio, then we’ll make our entry. For more information on my trading, please read my trading methods.
The Market
RBNZ has started its rate tightening cycle and NZD is on a somewhat bullish trend. It is expected to see NZD react to risk sentiment on a daily basis, but my money is on a gradual and steady upmove for the NZD until RBNZ decides to pause rate hikes.
It is also important to point out that fundamental outlook and economic indicators, such as the Retail Sales figure, does not have much effect on NZD as this currency follows risk sentiment and correlates strongly with global equity market (and commodities, of course).
More Thoughts
As this is a very slow moving currency, patience is definitely a required for a successful trade. With last week's exaggerated gains on NZD, we could see some pullback on a worse than expected release, therefore I'd be looking to sell from the top... However, if the opposite is true, expect some limited up move as I think NZD appreciation should be limited.
Due to the release time of this news, there will be less liquidity than normal. I suggest that unless we get our tradable deviation, staying out of this release is a must.
DEFINITION
“Measures the value of sales at the retail level. A rising trend has a positive effect on the nation’s currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises.”
For previous releases data of NZD Retail Sales and historical charts, click below:
NZ Retail Sales & Historical Charts
To see the actual charts, make sure you click on the "File Box" next to the news item on the right hand side. Historical chart should pop up in a new window.
Thanks,
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