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Forex Signal (Thu, August 12 2010, 6:45pm NY Time EST) - NZ Retail Sales m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Aug 12, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    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 0.5% Previous 0.4%
    ACTION: NZD/USD BUY 1.1% SELL -0.1%


    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 1.1% (or better) will be somewhat bullish signal for NZD and a -0.1% (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 (1.1%) or SELL (-0.1%) 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
    Since RBNZ has started its rate tightening cycle and NZD is on a somewhat bullish trend. It is expected to see NZD react to risk sentiment on a daily basis; with the recent risk aversion sentiment brought on first by the bearish FOMC sentiment and then followed by news out of China and Europe, NZD could suffer heavily this week... Considering the strong gains we saw during the past few week, NZD/USD has ample room to drop before hitting a support level.

    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.

    Pre-news Considerations
    With the general market under a strong risk aversion sentiment, NZD is trading lower and is likely to remain on this path until risk sentiment changes. With last week's employment data at -0.3% versus the 0.5% expected and Unemployment rate soaring to 6.8% versus 6.3% expected, we should see some pre-selling of NZD/USD prior to the release.

    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,


    [​IMG]
     
    #1 Henry Liu, Aug 12, 2010
    Lasted edited by : Sep 8, 2016
  2. LaurensDeGraff

    LaurensDeGraff Private

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    NZD retail trade

    Thanks Liu,

    I sat on the side, watching and waiting...great call on your part! Saved me some worrying this time. Keep calling it the ways you see it!:eek:oh:
     
  3. C. Collins

    C. Collins Private

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    Henry,
    For Wednesday for the AUD/USD you used the term "After news retracement method."
    Today Thursday for the NZD/USD you used the term "After Release retracement trade method."

    Please forgivethe dumb question, but do they both mean the same thing?

    Thanks for the help,
    C. Collins:)
     
  4. george soros

    george soros Private

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    You posted that at least 8 hours before the announcement. Are you clairvoyant ?
     
  5. mitchell_general

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    Hi Henry,

    I am sure you get asked this a lot. How do you get your news to know when to trade? I have started to use your signals only minus the news release. Can you help me?
     
  6. Huwee

    Huwee Corporal

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    Hey Mitchell,

    There's a number of free news services available - all of which have a bit of a delay in updating. Here's two that a lot of people use:
    • forexpeacearmy .com - go up to the menu bar at the top, hover over "Forex Calendar & Tools", then click on "Forex News Calendar"
    • forexfactory .com

    These might work for you if you follow Henry's retracement strategy (as per the recommendation in this report) because even though there's a delay in getting the news, you're waiting for a retracement anyway!

    Then there's ones you pay for which are immediate:
    • tradethenews .com (free 7-day trial available if they like the look of your LinkedIn profile!)
    • ransquawk .com (free 7-day trial available)

    Your broker may also provide a news service - double-check with them - but it might have a similar delay to the freebies above!

    Hope this helps!

    Huwee.
     
  7. mitchell_general

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    Thanks Huwee, I appreciate all the help.
     

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