Default Forex Signal (Thu May 12 2011, 8:30am NY Time EST) – US Core Retail Sales – Yesterday, 08:48 PM 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. Here’s the forecast: 8:30am (NY Time) US Core Retail Sales Forecast 0.7% Previous 0.8% 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 USD/JPY, or a 0.2% or worse to BUY GBP/USD. 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 Liu’s Trading Method The Market Today’s report will give us an indication of the economy’s current health. Bloomberg reports that sales are expected to have climbed in the past month which demonstrates that employment gains are carrying consumers through soaring fuel and food costs. Retail Sales climbed 0.6% in April after a 0.4% increase in March and Core Retail Sales are expected to jump 0.5% as well. Last Month, 244,000 payrolls were created despite a 9% rise in the jobless rate. Still, the improving job prospects is leading the way for consumer spending while gas prices have soared to almost 30 cents above the previous national average. Despite the increase at the pump, high prices are also contributing to the positive retail sales report. 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 Chart and Data for US Core Retail Sales

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.

Here’s the forecast:

8:30am (NY Time) US Core Retail Sales Forecast 0.7% Previous 0.8%
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 USD/JPY, or a 0.2% or worse to BUY GBP/USD. 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 Liu’s Trading Method

The Market
Today’s report will give us an indication of the economy’s current health. Bloomberg reports that sales are expected to have climbed in the past month which demonstrates that employment gains are carrying consumers through soaring fuel and food costs. Retail Sales climbed 0.6% in April after a 0.4% increase in March and Core Retail Sales are expected to jump 0.5% as well.

Last Month, 244,000 payrolls were created despite a 9% rise in the jobless rate. Still, the improving job prospects is leading the way for consumer spending while gas prices have soared to almost 30 cents above the previous national average. Despite the increase at the pump, high prices are also contributing to the positive retail sales report.

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 Chart and Data for US Core Retail Sales

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