Henry Liu
Former FPA Special Consultant
- Messages
- 473
Today’s Retail Sales number from UK will be widely watched as this is a high impact yet tradable report. Here is the forecast for this release:
4:30am (NY Time) Forecast 0.3% Previous 1.1%
ACTION: GBP/USD BUY 0.8% SELL -0.3%
The Trade Plan
Retail Sales by definition is a direct measurement of consumer activities at the retail levels. A higher release is generally good for the economy, and better for it’s currency; a lower release is considered as negative for the economy and not good for it’s currency.
Our tradable deviation or surprise factor for UK Retail Sales is 0.5% to BUY and 0.6% to SELL. If our deviation is hit, we can expect the market to move at least 50 pips within the hour, with a historical accuracy of 78%. We’ll be looking to BUY GBP/USD if we get a 0.8% or better release, and SELL GBP/USD if we get a -0.3% or worse.
We'll be looking for an after-news retracement trade for this release. For more information on my trading methods:
Henry's News Trading Methods.
The Market
GBP has gained on the back of a weaker EUR, better CPI, and hawkish statement from BOE Miles yesterday. It seems that inflationary pressure is still uncomfortably high in UK, therefore further quantitative easing to stimulate the economy may be delayed.
Traders are now looking for direction from this release to push GBP, as a negative release will help to consolidate recent gains; a better than expected release might push beyond recent highs and break above 1.5700 psychological resistance.
Additional Thoughts
GBPUSD has broken above the 1.5600 level and out of the range started since early August... if we get a positive number, we could see further strength in the currency and retesting the 1.6000 is not out of the realm of possibilities in the next few weeks.
Pre-news Consideration
No pre-news consideration for this trade... Although we did get a bit of worse Claimant Count, I don't think it is wise to go against general market trend.
For historical chart & data for UK Retail Sales
Thanks,
4:30am (NY Time) Forecast 0.3% Previous 1.1%
ACTION: GBP/USD BUY 0.8% SELL -0.3%
The Trade Plan
Retail Sales by definition is a direct measurement of consumer activities at the retail levels. A higher release is generally good for the economy, and better for it’s currency; a lower release is considered as negative for the economy and not good for it’s currency.
Our tradable deviation or surprise factor for UK Retail Sales is 0.5% to BUY and 0.6% to SELL. If our deviation is hit, we can expect the market to move at least 50 pips within the hour, with a historical accuracy of 78%. We’ll be looking to BUY GBP/USD if we get a 0.8% or better release, and SELL GBP/USD if we get a -0.3% or worse.
We'll be looking for an after-news retracement trade for this release. For more information on my trading methods:
Henry's News Trading Methods.
The Market
GBP has gained on the back of a weaker EUR, better CPI, and hawkish statement from BOE Miles yesterday. It seems that inflationary pressure is still uncomfortably high in UK, therefore further quantitative easing to stimulate the economy may be delayed.
Traders are now looking for direction from this release to push GBP, as a negative release will help to consolidate recent gains; a better than expected release might push beyond recent highs and break above 1.5700 psychological resistance.
Additional Thoughts
GBPUSD has broken above the 1.5600 level and out of the range started since early August... if we get a positive number, we could see further strength in the currency and retesting the 1.6000 is not out of the realm of possibilities in the next few weeks.
Pre-news Consideration
No pre-news consideration for this trade... Although we did get a bit of worse Claimant Count, I don't think it is wise to go against general market trend.
For historical chart & data for UK Retail Sales
Thanks,
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