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 0.3% Previous 0.7%
ACTION: GBP/USD BUY 0.9% SELL -0.2%
The Trade Plan
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% to BUY and 0.5% to SELL. If our deviation is hit, we can expect the market to move at least 50 pips within the hour, with a historical accuracy of 74%. We’ll be looking to BUY GBP/USD if we get a 0.9% or better release, and SELL GBP/USD if we get a -0.2% or worse.
The Market
Today’s MPC Meeting Minutes surprised the market with an unanimous vote against increasing the quantitative easing programor APF. Andrew Sentance was once again the only dissenter voting for a rate hike of 25 basis point in a 1-8 vote against further tightening policy.
Because of recent BOE Inflation Report and uncertainty in the inflation letter sent by BOE Governor King to the Chancellor of the Exchequer George Osborne, market was speculating at least two votes for increasing the Asset Purchasing Facility by another 25 Billion Pound. Needless to say, traders immeidately bought the GBP after the meeting minutes trying to price in this bullish release…
However, the overall sluggish outlook for UK’s economy remains unchanged. I would expect to see long-term bearish trend to resume. Seeing how the market retraced from the 1.5680 level down to the 1.5580 during late NY trading session should be an additional confirmation that the momentum for the GBP rally is short-lived.
Additional Thoughts
GBP/USD will need to break and remain above the 1.5700 in order to see further gain. However, with recent housing data, employment data, and the CPI data all pointing to the fact that recovery in UK economy is stalling; and adding the bearish tone from last week’s quarterly Inflation Report and this week’s Inflation letter by BOE King, we are looking at a possible change of sentiment for the GBP with the first psychological support level at 1.5000 in perhaps 3 months.
Pre-news Consideration
With Claimant Count at -3.8K versus -17.0K, tax increases, job cuts, tough austerity measures, and negative fundamental sentiment, it is likely to see limited pre-selling in the GBP prior to the release today. I’d be looking for a pre-news sell on a decent spike up.
My previous Live UK Retail Sales Video
Related posts:
- Forex Analysis UK Retail Sales 06/16/11
- Forex Trade Plan & Video For UK Retail Sales 07/22/10
- Forex Analysis For UK Retail Sales 07/21/11
- Forex News Trading Plan For UK Retail Sales m/m 11/18/10
- Trade Plan For UK Retail Sales 05/20/10
- Forex News Trading UK Retail Sales m/m 01/21/11
- Trading Plan For UK Retail Sales 06/17/10
- Forex News Trading UK Retail Sales 12/16/10
- Forex Strategy for UK Retail Sales 08/18/11
- UK Retail Sales m/m 01/22/10
{ 13 comments… read them below or add one }
Hi Henry,
Nice to see your blog i’d like it. Just found your blog yesterday and stright the way using your method in my trading news… bingo got profit 50pips on UK retail sales… thank you for your concern and attention on trading.
I’d like to hear more from u about anything to make profitable trading. I think you’re doing a good job for people.
thank you..and nice to know you.
Cheers
Stanley
Hi Henry,
i just found your blog recently and followed your menthod firts time at yesterday UK news Retail Sales and made 51pips.. You are making a good job for all traders like me..thanks for your info and research it’s helpful to everybody.. cheers.
Regards,
Stanley
This my best trade I have had since started trading forex. made over 50pips + 2lots. Welldone Henry, keep the good work up.
This is excellent stuff Henry. I think it is the smartest approach to News trading i have seen. Keep it up and thanks for the hard work you have put in to the methodology, calculations and ongoing analysis.
Thanks Henry,
I made 50 pips, personaly I have problem with take profit timing. I often closing trade very soon. I close trade at 1.5592, but if I would stop the trade later, I could make more pips.
Orion
Hi Henry,
I am new to news trading, and still watch and learn.
I think the service you provide is outstanding. Thanks a lot.
I have one question, what are those numbers in the bottom right corner on the screen in your video?
Those are my currencystrengthmeter.com
You can download it, it is free.
Now I see how powerfull newstrading is. The pound shot up. But I was in too late. Maybe AVAfx ‘s messages come in late. Anyway thanks for the signals. But I will only be really happy when you open your 10K to 1MM again.
Then I probably will be in time for all news related trades. Cheers, Guus
Where can we watch the live version of this video during the news release.
You need to be in the traderoom. It is reserved exclusively for my Mastermind Mentoring students. Next registration opening will be soon.
Henry, are you looking on including or excluding autos RS MoM?
headline Retail, which is including autos.
Thank you for the trading information. It’s really helpful…