Forex Signal (Wed December 1 2010, 7:30pm NY Time EST) - AU Retail Sales m/m

[Henry Liu]

We’ll be getting the Retail Sales figure from Australia today once again, and if you’ve been following news out of Australia, you’d know that Retail Sales has been a sticky point for aussie economy and a strong improvement may change the short term trend for the currency. Here’s the forecast:

7:30pm NY Time AU Retail Sales Forecast 0.4% Previous 0.3%
ACTION: AUD/USD BUY 1.0% SELL 0.0%

The Trade Plan
The deviation that we are looking for the Australian Retail Sales m/m release is for a minimum of 0.6%. If we get a 1.0% (or better) we'll look to buy and if we get 0.0% (or worse), we’d look to SELL. There is a high probability of market movement of over 50 pips in the next 2 hours if we get our deviation.

We'll be looking for an after-news retracement trade and we'll do the 3 W's. Wait for the deviation, wait for the market to move with momentum first, and wait for a decent retracement. For more information on my trading methods, please read:
Henry's News Trading Method

The Market
AUD/USD is suffering at the past two weeks of risk aversion flows. With the quarterly GDP for the 3rd quarter only at 0.2% (it came out 0.3% less than expected), market is ready to sell AUDUSD...

Additional Thoughts
AUDUSD is a very slow moving currency pair. If the release hits our deviation, we may have to jump in sooner than later... We could see very little retracement, if any, if we get a huge surprise in the market. I am more inclined to SELL AUDUSD than to BUY AUDUSD, and I believe market is likely to move more on a weaker than expected Retail Sales release...

However, we could definitely look to SELL into the rally if we get a strong Retail Sales number, the overall trend in weaker AUD is likely to stay.

Pre-news Consideration
There is no pre-news sentiment for this release.

DEFINITION
“Measures the value of sales at the retail level. A rising trend has a positive effect on the nation’s currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders payclose attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises.”

Historical Chart & Data For AU Retail Sales

Thanks,

 

[4x4Ever]

Ouch! Thats got hurt lol Did you see that release number!

 

[4x4Ever]

What Happened??

Hi Henry,

First off let me say I was happy to see you come and take over the news trading on the FPA. I've been a fan and signed up to your mailing list for quite sometime now. Thank you for all your great analysis and help with the news. Your currency strength meter is one of my favorite indicators and I use it as extra confirmation when placing trades all the time, or when looking for a market to get into its very handy for pairing weaker and stronger currencies. Thanks again for all you do and God bless. Now....

I have a question if you could please answer. What the heck happened with this news release on Retail Sales from AU? I mean wasn't that a bomb? Shouldn't AUD be going down steady? I just don't understand this one the total opposite of what should have happened, happened???
I already wanted to go short on AUD/USD and ride the trend for awhile and I was hoping this would be the catalyst to help along.

SO my big question, should I be worried now about holding this short??
At the time of writing this its about a 30 point loss and has barely seen profitable moments since the release.

Thanks for all you do and a special thanks if you could give me your opinion on why that release seemed to have no affect. Take care, God bless and have a great day.

Regards,
Markus