Trading Plan For UK Retail Sales 06/17/10

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 0.1%   Previous 0.3%
ACTION: GBP/USD         BUY 0.7%       SELL -0.5%

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%. 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%.  Judging from the recent move of the GBP/USD pair above the 1.4800, this release may add to further demand for GBP if we get a surprise better than expected release.  However, with UK’s budget and spending cut widely expected by traders, a worse than forecasted release may accelerate sell-offs for the Sterling as concerns over the new policy may stall recovery.

We’ll be looking to BUY GBP/USD if we get a 0.7% or better release, and SELL GBP/USD if we get a -0.5% or worse.

Related posts:

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Tagged as: Consumer Consumption, currency, economy, Expectation, GBP, GBP/JPY, GBP/USD, GDP, Headline Number, market sentiment, Measurement, retail level, Retail Sales, Sales Forecast, Sterling, UK, uk retail sales