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:
9:30pm NY Time AU Retail Sales Forecast 0.4% Previous 0.2%
ACTION: AUD/USD BUY 1.0% SELL -0.2%
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 -0.2% (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.
The Market
AUD/USD made it above the 0.90000 on Sunday open benefitting from the risk appetite sentiment of a possible BOJ Intervention. However, the gains were pared off after BOJ disappointed the market with a much smaller stimulus than expected.
With the general sense of risk aversion, I would expect the market to sell off AUD on a weaker Retail data. However, if we get a strong data, there might be an opportunity to SELL into the rally as AUD/USD pushes up towards the 0.9100~0.9200 levels. I believe with recent economic releases and the uncertainty over its political direction, AUD should retrace down to the 0.8800 level once the initial optimism is over.
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.
Pre-news Consideration
I don’t think Retail Sales out of AU has the momentum to move pre-news market… So I’d stay out of the market.
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.”
Related posts:
- Australia Retail Sales Forex Trading Plan 12/01/10
- Forex News Trading Plan For Australian Retail Sales 10/04/10
- Forex News Trade AU Retail Sales m/m 6/1/11
- Australia Retail Sales Trading Plan 05/31/10
- Forex News Trading Australian Retail Sales 11/03/10
- Forex News Trading AU Retail Sales m/m 03/30/11
- Forex News Trading AU Retail Sales m/m 02/28/11
- Forex News Trading AU Retail Sales m/m 05/04/11
- Forex Strategy For AU Retail Sales 08/01/11
- Forex News Trading AU Retail Sales 10/04/11
{ 1 comment… read it below or add one }
Great, insightful and detailed analysis. I have been watching and hope to trade this news release big time. Thank you Henry for the good work to humanity and please keep it up.