Forex Trade Plan For NZ Retail Sales m/m 07/13/10

We’ll be getting the Retail Sales figure out of New Zealand today, since Retail Sales is a direct reflection of the economy, this release is considered as an high impact release… Here’s the forecast:

6:45pm (NY Time) NZ Retail Sales   Forecast 0.6%     Previous -0.3%
ACTION: NZD/USD                                      BUY 1.2%                 SELL 0.0%

Retail Sales release is the measurement of consumer spending in the retail sector, as it reflects the strength of the economy and the strength of consumer spending. We’ll be looking for a difference (or deviation) of at least 0.6% from the Forecasted number, therefore a positive 1.2% (or better) will be somewhat bullish signal for NZD and a 0.0% (or worse) will be a bearish signal for NZD. Our focus will be on the Headline release, not on the Core Release… However both releases shouldn’t conflict, or it will be an automatic no trade.

Since RBNZ has started its rate tightening cycle and NZD is on a somewhat bullish trend. It is expected to see NZD react to risk sentiment on a daily basis, but my money is on a gradual and steady upmove for the NZD until RBNZ decides to pause rate hikes.  It is also important to point out that fundamental outlook and economic indicators, such as the Retail Sales figure, does not have much effect on NZD as this currency follows risk sentiment and correlates strongly with global equity market (and commodities, of course).

One word of caution: Due to the release time of this news, there will be less liquidity than normal. I suggest that unless we get our tradable deviation, staying out of this release is a must.

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 pay close 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.”

Here’s a live trading video of NZ Retail Sales that I’ve taken previously:

[flv:http://www.newsprofiteer.com/101209-nzdretail/101209-nzdretail.mp4 480 360]

Related posts:

1. Forex Trade Plan For NZ Retail Sales 08/12/10
2. Forex Trade Plan NZ Retail Sales 09/13/10
3. Forex News Trading Plan For NZ Retail Sales 01/20/11
4. New Zealand Retail Sales m/m 11/11/09
5. New Zealand Retail Sales m/m 10/12/09
6. Forex News Trading NZ Retail Sales q/q 08/24/11
7. New Zealand Retail Sales 01/20/10
8. Forex Trade Plan For AU Retail Sales 08/30/10
9. Australia Retail Sales m/m 12/02/09
10. Trade Plan For UK Retail Sales 05/20/10

Tagged as: bullish signal, Consensus, Consumer Behavior, Consumer Spending, currency, economy, Focus, Forecast, Forex News, GDP, Initial Confirmation, Large Portion, Measurement, Negative Signal, New Zealand, New Zealand Retail Sales, NZ, NZD, Patience, Proper Risk, retail level, Retail Sales, retail sector, retracement, Sizable Impact, Surprises, Virtue