Henry Liu
Former FPA Special Consultant
- Messages
- 473
We’ll be getting the Retail Sales figure from Australia today once again, and if you’ve been following news out of Australia, you’d know that Retail Sales has been a sticky point for aussie economy that any strong deviation may change the short term trend for the currency. Here’s the forecast:
9:30pm NY Time AU Retail Sales Forecast 0.4% Previous 0.2%
ACTION: AUD/USD BUY 1.0% SELL -0.2%
The Trade Plan
The deviation that we are looking for the Australian Retail Sales m/m release is for a minimum of 0.6%. If we get a 1.0% (or better) or -0.2% (or worse), we’d look to get in either on a LONG (1.0+) or SHORT (-0.2%) trade depending on the release, with a high probability of seeing the market move over 50 pips in the next 2 hours.
I'll be looking to trade this release using my Retracement Trade method after the release. For more information on my trading method:
Henry's Retracement Trade Method.
The Market
With what took place recently in the market and the general sense of risk appetite supporting risk currencies such as the AUD, this release could obviously change the short term trend. With Australia's unemployment rate at 5.1% and the effects of mining boom, it is logical to expect Retail Sales figure to be better than expected; however, consumer spending has been a sore point in the Australian economy, and as a matter of fact, in the past 6 releases, there were actually 4 worse than expected actual figures, with one deviating as much as -1.7% from the forecast (-1.4% vs 0.3%e)... This means that today's release will be as much as a surprise to anyone, if our tradable deviation is hit.
Additional Thoughts
AUD/USD is a slow moving currency. With this pair sitting at the top of its range, it requires another news catalyst to push this pair down, and the Retail Sales may be the one. If we get a significantly worse than expected release, expect market to SELL AUD/USD into the rate decision.
Pre-Market Consideration
Since RBA will be releasing its rate decision in under 3 hours, we should see some profit taking (if AUD is strong) or sell-off (if AUD is already dropping) during today's Asian trading session. Of course this would depend on the general sentiment of the market and the outcome of the Retail Sales, but I'd be looking for a SELL on AUD/USD based on recent highs (0.9105) prior to the Retail Sales, lock in my stop (if I am up at least 50 pips), and leave a small portion running for a possible downward breakout.
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 payclose 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.”
Historical chart and data for AU Retail Sales
Thanks,
9:30pm NY Time AU Retail Sales Forecast 0.4% Previous 0.2%
ACTION: AUD/USD BUY 1.0% SELL -0.2%
The Trade Plan
The deviation that we are looking for the Australian Retail Sales m/m release is for a minimum of 0.6%. If we get a 1.0% (or better) or -0.2% (or worse), we’d look to get in either on a LONG (1.0+) or SHORT (-0.2%) trade depending on the release, with a high probability of seeing the market move over 50 pips in the next 2 hours.
I'll be looking to trade this release using my Retracement Trade method after the release. For more information on my trading method:
Henry's Retracement Trade Method.
The Market
With what took place recently in the market and the general sense of risk appetite supporting risk currencies such as the AUD, this release could obviously change the short term trend. With Australia's unemployment rate at 5.1% and the effects of mining boom, it is logical to expect Retail Sales figure to be better than expected; however, consumer spending has been a sore point in the Australian economy, and as a matter of fact, in the past 6 releases, there were actually 4 worse than expected actual figures, with one deviating as much as -1.7% from the forecast (-1.4% vs 0.3%e)... This means that today's release will be as much as a surprise to anyone, if our tradable deviation is hit.
Additional Thoughts
AUD/USD is a slow moving currency. With this pair sitting at the top of its range, it requires another news catalyst to push this pair down, and the Retail Sales may be the one. If we get a significantly worse than expected release, expect market to SELL AUD/USD into the rate decision.
Pre-Market Consideration
Since RBA will be releasing its rate decision in under 3 hours, we should see some profit taking (if AUD is strong) or sell-off (if AUD is already dropping) during today's Asian trading session. Of course this would depend on the general sentiment of the market and the outcome of the Retail Sales, but I'd be looking for a SELL on AUD/USD based on recent highs (0.9105) prior to the Retail Sales, lock in my stop (if I am up at least 50 pips), and leave a small portion running for a possible downward breakout.
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 payclose 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.”
Historical chart and data for AU Retail Sales
Thanks,
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