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Forex Signal (Fri October 15 2010, 8:30am NY Time EDT) - US Core Retail Sales m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Oct 15, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    We’ll be getting the Core Retail Sales (and Retail Sales) figure out of U.S. today, as high impact news releases are concerned, Retail Sales makes up about 2/3 of U.S. GDP (economy)… Here’s the forecast:

    8:30am (NY Time) US Core Retail Sales Forecast 0.4% Previous 0.6%
    ACTION: 1.0% BUY USDJPY / -0.2% BUY EURUSD


    Since we have both Retail Sales & Core CPI scheduled to be released at the same time, we should concentrate on the Retail Sales as it provides a better glimpse of the economy. However, it’s important to make sure there is no conflict between both releases or we should just stay out of the market until a new direction has been established.

    The Trade Plan
    The plan to trade this release is straight forward. We are going to wait for 1.0% of release or better to BUY USD/JPY, or a -0.2% or worse to BUY EURUSD… If we get a in-between release, we’ll need to look at the pre-release market condition in order to make a decision, or just stay out of the market altogether.

    As stated before, due to both high impact releases coming out the same time, we have to trade these releases using after news retracement method because market reaction may be hard to predict.

    For more information on my trading method:
    Henry's News Trading Methods.

    The Market
    The medium forecast of 57 economists surveyed by Bloomberg is at 0.4% of gain on the Core release, while the headline release is expected to be around 0.5%.

    With Unemployment Rate near 26-year highs, there should not be upward surprise for the Core release, but looking at the seasonal factors, we could see a higher release on the Headline Retail Sales as reports from GM and Ford are showing double digits growth when compared with data from a year ago.

    Additional Thoughts
    Market could be trading in a tight range coming to this event, if we get surprising better than expected releases, we could see some consolidation in recent negative sentiments against USD.

    On the other hand, if we get a worse than expected numbers, we could see further weakening of USD as speculators take advantage of this news catalyst to sell USD for another round.

    Pre-news Consideration
    With the current high unemployment rate and the dismal NFP readings, Core Retail Sales could come out worse than expected; however, with seasonal factors and the extend of the exaggeration in recent depreciation of USD, market could take a wait-and-see stance... Therefore, no pre-news trading.

    DEFINITION:
    “(Retail Sales Core) Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.”

    Historical Data and Chart For US Core Retail Sales


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Oct 15, 2010
    Lasted edited by : Sep 8, 2016
  2. kasfulfx

    kasfulfx Recruit

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    Thanks henry!
     
  3. Simon Edwards

    Simon Edwards Corporal

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    Question of the day is if todays us releases are bad is aud/usd going to hit parity....
     

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