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Forex Signal (Mon, August 2 2010, 9:30pm NY Time EST) - AU Retail Sales m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Aug 1, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    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,


    [​IMG]
     
    #1 Henry Liu, Aug 1, 2010
    Lasted edited by : Sep 8, 2016
  2. FXace

    FXace Recruit

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    The Daily FX calendar shows these announcements taking place tuesday
     
  3. Huwee

    Huwee Corporal

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    Hey FXace,

    I just checked the calendar and it shows it as today (NY time):
    21:30 AUD Retail Sales m/m

    I also checked FastEconomicNews. com and it seems to show the same day/time today?

    Huwee
     
  4. ahab666

    ahab666 Private, 1st Class

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    if you set your timezone in the FXF calender it might as well be tuesday for you ... ;)
     
  5. duck

    duck Private, 1st Class

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    Minor correction...that's actually a deviation of 1.7%, which is even more substantial!
     
  6. Horacio Ofman

    Horacio Ofman Recruit

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    When to spike or retrace?

    Hi Henri.
    Tried to ask you this on your education area, but my post didn't seem to appear.

    What is your main criteria to decide to use a spike trading technique or the retracement technique?
    Is it the currency pair, or the type of news? or any other factor? Can you please explain this.

    Thanks,
    Horacio
     
  7. Henry Liu

    Henry Liu Former FPA Special Consultant

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    I stand corrected... Thanks!
     
  8. Henry Liu

    Henry Liu Former FPA Special Consultant

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    Horacio: It's usually the news. It must be a trend changing news with strong momentum to move the market that even with paying the large spread and dealing with initial slippage, you would still end up with profits. Examples of news: Interest Rate Decisions, GDP, and sometimes CPI.
     
  9. Horacio Ofman

    Horacio Ofman Recruit

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    Thanks for your prompt reply. Happy trading
     
  10. Huwee

    Huwee Corporal

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    Thanks Henry, at 5pm (ET) I went short at 9.137 so just before the release I was already +20 pips (9.117). Moved in my stop losss to 9.127 (so minimum would have been +10 pips).

    Release came out... it went down - so at time of writing currently +31 pips... have moved my stop loss to 9.110 and target profit to 9.091... will let the trade close out by hitting either of these :- )

    Cheers!
     

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