Forex Signal (Fri March 11 2011, 8:30am NY Time EST) – US Core Retail Sales m/m – Today, 03:32 AM

We’ll be getting the Core Retail Sales (and Retail Sales) figure out of U.S. today, as high impact news releases are concerned, Retail Sales makes up about 2/3 of U.S. GDP (economy)… Here’s the forecast:

8:30am (NY Time) US Core Retail Sales Forecast 0.7% Previous 0.3%
ACTION: 1.2% BUY USDJPY / 0.2% BUY GBPUSD

The Trade Plan
The plan to trade this release is straight forward. We are going to wait for 1.2% release or better to BUY USDJPY, or a 0.2% or worse to BUY GBPUSD… If we get a in-between release, we’ll need to look at the pre-release market condition and sentiment in order to make a decision, or just stay out of the market altogether.

We will trade this news release using after news retracement method, I will pay attention to both headline and Core Retail Sales figures, but my focus will be on the Core figure.

For more information on my trading method:
Henry’s News Trading Methods.

The Market
Core Retail Sales, or Retail Sales ex Auto is expected to be around 0.7%, and according to a survey of 63 analysts obtained by Bloomberg forecasts a headline Retail Sales of 1.0%.

J.C Penny and Macy’s Inc. were among retailers that beat most analysts’ estimates in the month of February, and if this is of any indication, we should expect a release figure near the forecast or better. Also the improvement in employment and in recent weather conditions should give a boost to the sales number.

Additional Thoughts
Since both releases (Core Retail Sales and Retail Sales) are scheduled together, if we get a conflict in the releases, we should stay out regardless whether or not we get our tradable deviation…

Pre-news Consideration
There should be no pre-news trading.

DEFINITION:
“(Retail Sales Core) Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.”

Historical Data and Chart for US Core Retail Sales

Thanks,

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