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Forex Signal (Tue June 14 2011, 8:30am NY Time EST) - US Core Retail Sales...

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jun 13, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    We´ll be getting the U.S. Core Retail Sales (and Retail Sales) figure out tomorrow. As high impact news releases are concerned, Retail Sales make up about 2/3 of U.S. GDP (Gross Domestic Product); Core Retail Sales report excludes Auto sales which comprises 20% of total retail sales. Therefore, we are more focused on daily consumer spending on goods found in such places as department stores, gas stations, and restaurants.

    Here´s the forecast:

    8:30am (NY Time) US Core Retail Sales Forecast 0.3% Previous 0.6%
    ACTION: 1.0% BUY USDJPY / -0.3% BUY EURUSD

    The Trade Plan

    The plan to trade this release is straight forward. We are going to wait for 1.0% release or better to BUY USD/JPY, or a -0.3% or worse to BUY EUR/USD. If we get a in-between release, we´ll need to look at the pre-release market condition and sentiment 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 Liu's Forex News Trading Method

    The Market
    Retail Sales in May probably fell as the May NFP only showed a measly growth of 54K jobs. Combining with the supply shortage from Japan due to the disasters, this month’s headline Retail Sales is expected to be at 0.6%, or 0.3% ex auto. With Gas prices at average $3.90 at the beginning of the month and fallen to $3.72 by the end of the month, we may not see this being reflected on the Retail Sales today…

    Furthermore, retail giants such as the Limited (Victoria Secret) and Gap Inc all released worse than analysts expected sales figures for May… (Gap Inc. (GPS) is the largest US Retail Apparel Chain)

    Additional Thoughts
    Since both releases (Core Retail Sales and Retail Sales) are scheduled together, if we get a conflict in the releases, we should stay out regardless whether or not we get our tradable deviation.

    Pre-news Consideration
    There should be no pre-news trading.

    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 Chart & Data


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Jun 13, 2011
    Lasted edited by : Sep 8, 2016
  2. PipDog

    PipDog Corporal

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    Watch Out For Risk Aversion

    If the news is negative, and you follow Henry's advice to buy the EURUSD, be careful. You may see a whipsaw down due to risk aversion...again.

    May want to consider selling the USDCHF instead of buying the EURUSD.
     

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