We´ll be getting the U.S. Core Retail Sales (and Retail Sales) figure out tomorrow. As high impact news releases are concerned, Retail Sales make up about 2/3 of U.S. GDP (Gross Domestic Product); Core Retail Sales report excludes Auto sales which comprises 20% of total retail sales. Therefore, we are more focused on daily consumer spending on goods found in such places as department stores, gas stations, and restaurants.
Fundamental News
We´ll be trading the UK Consumer Price Index (CPI) release at 4:30am NY Time today. We´ll be looking at the yearly release figure and the market could react with lots of volatility as CPI is the basic measurement of Inflation, therefore expect to see more exaggerated moves if we get a huge surprise release. Here is the forecast:
4:30am NY Time UK CPI y/y Forecast 3.6% Previous 4.2%
ACTION: GBP/USD BUY 4.2% / SELL 3.3%
ECB (European Central Bank) will be rendering its rate decision today, and it will have a pivotal short term impact in the Euro dollar. However, it is widely believed that ECB will keep rate unchanged at 1.00%… Here´s the forecast:
7:45am (NY Time) EU ECB Rate Decision Forecast 1.00% Previous 1.00%
ACTION: EUR/USD SELL 0.75%
Canada´s monthly GDP report will be released today. Here´s the trading forecast:
8:30am NY Time Canada GDP m/m Forecast 0.2% Previous 0.2%
ACTION: USD/CAD SELL 0.5% / BUY -0.1%
The Trade Plan
Let´s look to SELL USD/CAD if we get a 0.5% or better release, or we’ll BUY USDCAD on a -0.1% or worse release. With recent uncertainty in the general market, a strong surprise in this GDP number may be the catalyst we need to see more volatility in CAD, and perhaps set the tone for the rest of the year…
Here is the forecast for the US Advanced GDP q/q :
8:30am (NY Time) US Advance GDP q/q
Forecast 3.0% Previous 1.8%
ACTION: SELL EURUSD 3.3% / BUY EURUSD 2.5%
The Trade Plan
We are looking for a deviation between 0.3% ~ 0.5% from the forecasted figure of 3.0%. Therefore if we get a 3.3% on the 4th quarter GDP, it would be US Dollar positive. We will SELL EURUSD. However, if we get a 2.7% release or worse, then we would be BUY EURUSD. We’ll be looking to trade this release based on my Retracement Trading Method; since this is a high impact release, strong market volatility is expected immediately after the release.
RBNZ (Reserve Bank of New Zealand) will be releasing its interest rate decision today and it is widely expected that Gov. Bollard will announce that No rate change today…
3:00pm (NY Time) RBNZ Rate Decision Forecast 2.50% Previous 2.50%
ACTION: NZDUSD BUY 2.75%
The Trade Plan
Current forecast from economists surveyed by Bloomberg agree that RBNZ is likely to leave the official rate at 2.5% during this meeting; however, in the unlikely event that Gov. Bollard surprises the market and hike rates to 2.75% or higher, we should see an immediate strong demand in the NZD which is a great opportunity to spike trade BUY NZD/USD.
Retail Sales is usually a very tradable release as traders draw direct correlation between retail activities with economic health.
Here´s Forecast:
8:30am Core Retail Sales Forecast 0.2% Previous 0.7%
ACTION: USD/CAD BUY -0.3% / SELL 0.7%
The Trade Plan
I´m going to be looking for a deviation around 0.4 ~ 0.5% for this news. Since the forecast is at 0.4%, a reading of -0.3% would be negative for the CAD and we´ll be looking to BUY USD/CAD; however, if the opposite is true, or a 0.7% (or better) of actual release, I´ll be looking to SELL USD/CAD.
Forex Market Review and Upcoming Forex Calendar (May 14 ~ 18, 2012)
Forex Trading Strategies #3 – The Correct Trend
Forex Trading Strategies #4 – Support and Resistance
US FOMC Meeting Minutes – May 16, 2012 – Forex Strategy
Forex Trading Strategies #5 – Market Psychology
Forex Trading Strategies #2 – The Right Timing
US Core CPI – May 15, 2012 – Forex Strategy
Forex Trading Strategies #1 – The Real Reason