AU Retail Sales

We´ll be getting the Retail Sales figure from Australia today once again, and if you´ve been following news out of Australia, you´d know that Retail Sales has been a sticky point for Aussie economy and a strong improvement may change the short term trend for the currency. Here´s the forecast:
9:30pm NY Time AU Retail Sales Forecast 0.2% Previous 0.9%
ACTION: AUD/USD BUY 0.7% SELL -0.3%


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.”




The Trade Plan
The deviation that we are looking for the Australian Retail Sales m/m release is for a minimum of 0.5%. If we get a 0.7% (or better) we´ll look to buy and if we get -0.3% (or worse), we´d look to SELL. There is a high probability of market movement of over 50 pips in the next 2 hours if we get our deviation.

Primary currency pair: AUD/USD , EUR/AUD, AUD/NZD
Forecast: 0.2
Previous: 0.9
LT1 (Lower Trigger 1): -0.7 [SELL]
UT1 (Upper Trigger 1): +0.7 [BUY]

If the Australian Retail Sales m/m comes out at -0.5 or more negative ( -0.7 trigger), AUD/USD should go down by about 30 pips. If it comes out at +0.9 or higher ( +0.7 trigger), AUD/USD should go up by about 30 pips.

Based on 20 estimates, median estimate is 0.2% and the average estimate is 0.1%. The highest estimate is 0.8% (one vote), the second highest is 0.5% (two votes), and the third highest is 0.3% (three estimates). The lowest estimate is -1.0% (one vote), the second lowest is -0.3% (one vote), and the third lowest is -0.2% (three estimates). One standard deviation is +/- 0.4%.

We have kind of bad luck with this report as for so many times in a row it did not deviate enough to trigger a trade. In the past, we saw bigger deviations so the triggers I pick are realistic.




Last month it came out at 0.9% vs 0.2% expected, and we saw about 25 pip spike, followed by additional move over the time. Not bad considering it was Sunday, although we also had Retail Sales Ex-Inflation (Q/Q) released at the same time, also deviating in the same direction.

Two months ago it came out exactly as expected so it was a no trade.

Three months ago also it came out exactly as expected so it was another no trade.

Four months ago it came out at -0.1 vs. +0.2 expected so it was a no trade.

Five months ago it came out at 0.0 vs. 0.4 expected and we saw almost 30 pip spike on AUD/USD.

Six months ago it came out at 0.2 vs 0.4 expected so it was a no trade although we saw 20 pip spike on AUD/USD. Not bad.

Seven months ago it came out almost as expected so it was a no trade.

Eight months ago it came out at 0.6 vs 0.2 expected (+0.4 deviation) and AUD/USD spiked up by about 30 pips.

Nine months ago it came out at 0.5 vs 0.3 expected and although it was a no trade for us, we saw about 30 pip spike.

Ten months ago it came out at -0.1 vs +0.4 expected ( -0.5 deviation) and AUD/USD spiked down by about 50 pips. It was a pretty good price action.

Eleven months ago came out at -0.6 vs +0.3 expected ( -0.9 deviation), and AUD/USD moved down by over 30 pips. It was not a huge move but I guess good enough to make a few pips.

Twelve months ago it came out at 1.1 vs. 0.4 expected ( +0.7 deviation) and while AUD/USD spiked up from 1.0623 to 1.0659 (about 35 pips), we saw pretty fast retracement. Overall it was not a bad price action but not the best either.

Thirteen months ago it deviated first time in a while. It came out -0.5 vs. +0.5 expected ( -1.0 deviation), and AUD/USD moved down by over 50 pips. It was a pretty good trade.

Please remember that sometimes Australian reports are released locally before the news hits major news agencies. Therefore, please always pay attention to significant price movements right before the release.