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 0.0% Previous 0.9%
ACTION: NZD/USD BUY 0.6% SELL -0.6%
The Trade 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 0.6% (or better) will be somewhat bullish signal for NZD and a -0.6% (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 trading this release using after-release retracement trade method. Because NZD/USD is a very slow moving currency, if we get our BUY (0.6%) or SELL (-0.6%) figures, we should get plenty of opportunities for an entry...
For more information on my news trading methods:
Henry's News Trading Methods.
The Market
RBNZ will be rendering its interest rate decision this week, and consensus expectation is for an unchanged verdict. This will undoubtedly increase some bearish speculation on the NZD and it's likely if this Retail Sales release comes out negative, NZDUSD may drop significantly in the coming days.
With NZDUSD already at technical resistance levels, upside is limited but there are lots of potentials to the downside.
Additional Thoughts
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).
One word of caution: 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. In the event that we do get into a trade, market may move slowly and we may have to hold on to this trade for a few hours.
Pre-news Considerations
With the starting market trend on Sunday contradicting the overall fundamental outlook of NZD, I'd be very careful at placing my entry to sell NZDUSD from the top as I believe there may be some pre-selling going on with this release... However, wait until NY Session before taking this trade as market will be driven mostly by risk sentiment.
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.”
Historical Chart & Data of NZ Retail Sales
Thanks,
6:45pm (NY Time) NZ Retail Sales Forecast 0.0% Previous 0.9%
ACTION: NZD/USD BUY 0.6% SELL -0.6%
The Trade 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 0.6% (or better) will be somewhat bullish signal for NZD and a -0.6% (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 trading this release using after-release retracement trade method. Because NZD/USD is a very slow moving currency, if we get our BUY (0.6%) or SELL (-0.6%) figures, we should get plenty of opportunities for an entry...
For more information on my news trading methods:
Henry's News Trading Methods.
The Market
RBNZ will be rendering its interest rate decision this week, and consensus expectation is for an unchanged verdict. This will undoubtedly increase some bearish speculation on the NZD and it's likely if this Retail Sales release comes out negative, NZDUSD may drop significantly in the coming days.
With NZDUSD already at technical resistance levels, upside is limited but there are lots of potentials to the downside.
Additional Thoughts
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).
One word of caution: 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. In the event that we do get into a trade, market may move slowly and we may have to hold on to this trade for a few hours.
Pre-news Considerations
With the starting market trend on Sunday contradicting the overall fundamental outlook of NZD, I'd be very careful at placing my entry to sell NZDUSD from the top as I believe there may be some pre-selling going on with this release... However, wait until NY Session before taking this trade as market will be driven mostly by risk sentiment.
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.”
Historical Chart & Data of NZ Retail Sales
Thanks,
Last edited by a moderator:
