Forex Signal (Tue December 14 2010, 8:30am NY Time EST) - US Core Retail Sales m/m

[Henry Liu]

We’ll be getting the Core Retail Sales (and Retail Sales) figure out of U.S. today, as high impact news releases are concerned, Retail Sales makes up about 2/3 of U.S. GDP (economy)… Here’s the forecast:

8:30am (NY Time) US Core Retail Sales Forecast 0.7% Previous 1.2%
ACTION: 1.2% SELL EURUSD / 0.1% BUY GBPUSD

The Trade Plan
The plan to trade this release is straight forward. We are going to wait for 1.2% of release or better to SELL EURUSD, or a 0.1% or worse to BUY GBPUSD… If we get a in-between release, we’ll need to look at the pre-release market condition in order to make a decision, or just stay out of the market altogether.

We will trade this news release using after news retracement method, I will pay attention to both headline and core Retail Sales figures, but my focus will be on the Core figure.

For more information on my trading method:
Henry's News Trading Methods.

The Market
The medium forecast surveyed by Bloomberg stated that the Core figure is at 0.7% of gain while the headline figure is expected to be around 0.6%.

With year end shopping spree showing better than expected preliminary sales data from Target Inc., Walmart, and Macy, there is definitely a chance for this release to be better than expected...

Additional Thoughts
Market is suffering from lower liquidity and it is likely that a surprise release may change the short-term trend of the market, if the surprise is huge enough...

Pre-news Consideration
There are no pre-news consideration for this release.

DEFINITION:
“(Retail Sales Core) Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.”

Historical Data and Chart For US Core Retail Sales


Thanks,

 

[Onyebuchim C. Obike]

Conflicting Result

Market had a better reaction in the GBPUSD pair much more than the EURUSD as against your analysis.

It would have been better i'd placed an order to SELL in the GBPUSD than SELL in the EURUSD.

Probably you didnt forsee a better reaction in the GBPUSD else it would have been better to have sold on the GBPUSD than EURUSD.

 

[PipDog]

Not Enough Reaction

Market had a better reaction in the GBPUSD pair much more than the EURUSD as against your analysis.

It would have been better i'd placed an order to SELL in the GBPUSD than SELL in the EURUSD.

Probably you didnt forsee a better reaction in the GBPUSD else it would have been better to have sold on the GBPUSD than EURUSD.

I can't see where either pair showed much of a reaction at all. Since the news, it appears the dollar is strengthening on the back of risk aversion. No significant reaction to the news to even consider trading this one.