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 0.6%
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 0.5% to BUY and 0.6% 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 72%. 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.
I'd recommend a after release retracement trade, or Retracement Trading Method to trade this release. To learn more:
Henry's Retracement Method
The Market
Market sold off GBP yesterday on mixed outlook in the UK's economy but recovered sharply after BOE Sentance's bullish comments on the fact that market should not dismiss an end of the year rate hike from BOE. However, GBP suffered again after the release of today's MPC meeting minutes, which showed a 7-1 vote against Sentance. This led to GBP/USD dropping down to the 1.5200... GBP lost further against USD during Fed. Chief Bernanke's testimony over the "unusual uncertainty" over the economic recovery. Traders responded by buying US Treasuries.
Additional Thoughts
BOE Sentance did raise a valid point, especially after the amount of government spendings and budget cuts which will definitely help UK's economy and solidify its fundamental outlook in the long run. I believe the situation in UK is looking better and we should see strong resilience in the Sterling. However, the current risk aversion sentiment may continue and weigh down on all risk assets and commodity currencies, therefore we may see some decline in the Sterling for one or two sessions, but it's my opinion that GBP should recover as soon as we get a positive news catalyst.
I'd be looking to go LONG on GBP/JPY if this pair falls close to the 130 as GBP should strengthen and JPY should weaken in the mid to long term outlook...
For historical data and charts of UK Retail Sales:
Historical Charts & Data of UK Retail Sales
Thanks!
4:30am (NY Time) Forecast 0.5% Previous 0.6%
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 0.5% to BUY and 0.6% 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 72%. 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.
I'd recommend a after release retracement trade, or Retracement Trading Method to trade this release. To learn more:
Henry's Retracement Method
The Market
Market sold off GBP yesterday on mixed outlook in the UK's economy but recovered sharply after BOE Sentance's bullish comments on the fact that market should not dismiss an end of the year rate hike from BOE. However, GBP suffered again after the release of today's MPC meeting minutes, which showed a 7-1 vote against Sentance. This led to GBP/USD dropping down to the 1.5200... GBP lost further against USD during Fed. Chief Bernanke's testimony over the "unusual uncertainty" over the economic recovery. Traders responded by buying US Treasuries.
Additional Thoughts
BOE Sentance did raise a valid point, especially after the amount of government spendings and budget cuts which will definitely help UK's economy and solidify its fundamental outlook in the long run. I believe the situation in UK is looking better and we should see strong resilience in the Sterling. However, the current risk aversion sentiment may continue and weigh down on all risk assets and commodity currencies, therefore we may see some decline in the Sterling for one or two sessions, but it's my opinion that GBP should recover as soon as we get a positive news catalyst.
I'd be looking to go LONG on GBP/JPY if this pair falls close to the 130 as GBP should strengthen and JPY should weaken in the mid to long term outlook...
For historical data and charts of UK Retail Sales:
Historical Charts & Data of UK Retail Sales
Thanks!
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