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 0.4% Previous -0.5%
ACTION: GBP/USD BUY 1.0% SELL -0.1%
The Trade Plan
Retail Sales by definition is a direct measurement of consumer activities at the retail levels. A higher release is generally good for the economy, and better for it’s currency; a lower release is considered as negative for the economy and not good for it’s currency.
Our tradable deviation or surprise factor for UK Retail Sales is 0.6% to BUY and 0.5% to 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 81%. We’ll be looking to BUY GBP/USD if we get a 1.0% or better release, and SELL GBP/USD if we get a -0.1% or worse.
We'll be looking for an after-news retracement trade for this release. For more information on my trading methods:
Henry's News Trading Methods.
The Market
GBP has rebounded from yesterday's government spending and split vote MPC Minutes announcements. As a matter of fact, during yesterday's NY trading session, market almost breached above the 1.5900 level.
However, coming into today's trading session and the early signs of risk aversion (stronger USD & JPY), GBP could be heading downward despite of this release. With USD rallying primarily from consolidation of recent exaggerated devaluation, all European currencies, including GBP, is expected to be under bearish pressure.
Additional Thoughts
GBPUSD could drop to the 1.5650 level if we get a weak Retail Sales reading. If we do get a strong reading, I'd be looking for a smaller TP as the immediate trend is stacked against GBP.
Pre-news Consideration
No pre-news consideration for this trade... If there is anything to consider, it would be the general strength of USD which may very well work against GBP despite for positive expectations for this retail sales release.
For historical chart & data for UK Retail Sales
Thanks,
4:30am (NY Time) Forecast 0.4% Previous -0.5%
ACTION: GBP/USD BUY 1.0% SELL -0.1%
The Trade Plan
Retail Sales by definition is a direct measurement of consumer activities at the retail levels. A higher release is generally good for the economy, and better for it’s currency; a lower release is considered as negative for the economy and not good for it’s currency.
Our tradable deviation or surprise factor for UK Retail Sales is 0.6% to BUY and 0.5% to 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 81%. We’ll be looking to BUY GBP/USD if we get a 1.0% or better release, and SELL GBP/USD if we get a -0.1% or worse.
We'll be looking for an after-news retracement trade for this release. For more information on my trading methods:
Henry's News Trading Methods.
The Market
GBP has rebounded from yesterday's government spending and split vote MPC Minutes announcements. As a matter of fact, during yesterday's NY trading session, market almost breached above the 1.5900 level.
However, coming into today's trading session and the early signs of risk aversion (stronger USD & JPY), GBP could be heading downward despite of this release. With USD rallying primarily from consolidation of recent exaggerated devaluation, all European currencies, including GBP, is expected to be under bearish pressure.
Additional Thoughts
GBPUSD could drop to the 1.5650 level if we get a weak Retail Sales reading. If we do get a strong reading, I'd be looking for a smaller TP as the immediate trend is stacked against GBP.
Pre-news Consideration
No pre-news consideration for this trade... If there is anything to consider, it would be the general strength of USD which may very well work against GBP despite for positive expectations for this retail sales release.
For historical chart & data for UK Retail Sales
Thanks,
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