Australia Retail Sales m/m 09/29/09

9:30pm (NY Time) AU Retail Sales m/m      Forecast 0.6%    Previous -1.0%
ACTION: AUD/USD            BUY 1.2%      SELL -0.1%

The simple plan for today’s Retail Sales is that if we get a better than the forecast figure of 0.6%, we would BUY AUD/USD; and if we get worse than the forecast figure,  somewhere in the vicinity of -0.1% or worse, we will SELL AUD/USD.

The Australian Dollar has been untouchable lately due to the strong risk appetite sentiment that drives the market, and it is likely to show further strength if we get a better than expected release.  However, with USD consolidating with its recent losses, we could see a short window of weakness for the AUD as it also consolidate its recent gains.  The long term perception for AUD/USD is still above the 0.9000 level in the next 3 ~ 6 months, in my humble opinion. 

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.”

UPDATE: Took a loss with this trade as the release was positive but unable to push the market upwards with momentum.  I decided to take a SELL trade from the top, but with AUD/USD being so stubborn and with no traders even thinking about selling the pair, after 6 hours of watching this trade, I decided to take a 30 pips loss and called it a day…  I guess it would have worked out under normal conditions if the market weren’t so keen on risk appetite.  Let this be a lesson for me to consider risk sentiment as part of my trading decision.