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 -0.5% Previous 1.1%
ACTION: GBP/USD BUY 0.1% SELL -1.0%
The Trade Plan
The monthly retail sales report is a direct measurement of consumer activities at the retail level. A higher release is generally good for the economy, and better for it’s currency; a lower release is considered 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 or 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 72%. We’ll be looking to BUY GBP/USD if we get a positive release of at least 0.1%, and SELL GBP/USD if we get -1.0% or worse.
We’ll be looking for an after-news retracement trade for this release. For more information on my trading methods:
Henry Liu's Trading Method
The Market
Market consensus for this release is at a negative of -0.5%, which falls inline with reports from Home Retail Group PLC (HOME.LN), which stated that its consumer electronics sales at Argos were down 9.6%. The lack of consumer confidence, high inflation, and job insecurity in UK are definitely putting a halt on consumer spending.
Since one of five TVs in UK is sold by Argos, with a release of 8.1% of sales drop in May, the Retail Sales figure today will be inline or worse than expectation if this is of any indication...
Additional Thoughts
GBP is neutral to slight bearish due to funds flow out of EUR into GBP on Greek debt crisis... If this number comes out significantly worse, market could start to dump GBP as well and the impact could be more profound as recent data out of UK don't paint a healthy picture.
Pre-News Consideration
There could be a SELL trade prior to the release, depending on where the GBP is during Asian session.
Historical Chart and Data for UK Retail Sales m/m
Thanks,
4:30am (NY Time) Forecast -0.5% Previous 1.1%
ACTION: GBP/USD BUY 0.1% SELL -1.0%
The Trade Plan
The monthly retail sales report is a direct measurement of consumer activities at the retail level. A higher release is generally good for the economy, and better for it’s currency; a lower release is considered 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 or 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 72%. We’ll be looking to BUY GBP/USD if we get a positive release of at least 0.1%, and SELL GBP/USD if we get -1.0% or worse.
We’ll be looking for an after-news retracement trade for this release. For more information on my trading methods:
Henry Liu's Trading Method
The Market
Market consensus for this release is at a negative of -0.5%, which falls inline with reports from Home Retail Group PLC (HOME.LN), which stated that its consumer electronics sales at Argos were down 9.6%. The lack of consumer confidence, high inflation, and job insecurity in UK are definitely putting a halt on consumer spending.
Since one of five TVs in UK is sold by Argos, with a release of 8.1% of sales drop in May, the Retail Sales figure today will be inline or worse than expectation if this is of any indication...
Additional Thoughts
GBP is neutral to slight bearish due to funds flow out of EUR into GBP on Greek debt crisis... If this number comes out significantly worse, market could start to dump GBP as well and the impact could be more profound as recent data out of UK don't paint a healthy picture.
Pre-News Consideration
There could be a SELL trade prior to the release, depending on where the GBP is during Asian session.
Historical Chart and Data for UK Retail Sales m/m
Thanks,
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