Forex Analysis For UK Retail Sales 03/22/12

Today´s Retail Sales number from UK will be widely watched as this is a high impact yet very tradable report. Here is the forecast for this release:

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5:30am (NY Time) Forecast -0.5% Previous 0.9%
ACTION: GBP/USD BUY 0.1% SELL -1.0%

The Trade Plan
The monthly retail sales report is a direct measurement of consumer activities at the retail level. A higher release is generally good for the economy, and better for it´s currency; a lower release is considered negative for the economy and not good for it´s currency.

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Our tradable deviation or surprise factor for UK Retail Sales is 0.6% to BUY and -0.5% 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 72%. We´ll be looking to BUY GBP/USD if we get any positive figure (at least 0.1%), and SELL GBP/USD if we get -1.0% or worse.

We´ll be looking for an after-news retracement trade for this release. For more information on my trading methods:
http://www.currencynewstrading.com/how-to-get-started-with-news-trading/

The Market
With yesterday’s MPC Meeting Minutes where two members of MPC votes for more stimulus citing recent rise in energy prices, GBP is likely to be under pressure if we were to get a worse than expected release.  With the recent strength in the USD, GBPUSD should be a sell on rally pair. 

Additional Thoughts
GBP is bearish due to its fundamental outlook. However, I do feel that most of the negativities have been priced in at the current level… Therefore, news like the Retail Sales are going to play a pivotal role for the short-term.

Pre-News Consideration
There is no pre-news trading.

Thanks,

About Henry Liu

My name is Henry Liu and I am a Forex Trader and Mentor. I help traders achieve consistent income trading Forex while spending less time trading. My focus in trading is a combination of Fundamental Analysis, Technical Analysis, and Market Sentiment. Far too many retail Forex traders concentrate on just one aspect of trading, technical analysis, and ignore everything else; it is my goal (and vision) to educate every trader on how to take advantage of news trading and become more balanced traders.

You can find more information about me on my Google Profile.

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