AU RETAIL SALES

NEWS TRADING
Monday April 2, 2012


[9:30pm NY Time]

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 0.3%
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 PlanThe 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.
We´ll be looking for an after-news retracement trade and we´ll do the 3 W´s. Wait for the deviation, Wait for the market to move with momentum first, and Wait for a decent retracement.


The MarketAustralian Retail Sales is expected to expand by 0.2% today… Recent market sentiment has been adding pressure to the AUD, especially considering the slowdown of growth in China, Australia’s largest trade partner.  With AUDUSD overvalued at a minimum of 25%, I believe AUDUSD may correct sharply and suddenly; however, with recent speculation for US QE3 on the rise, AUDUSD may find support temporarily and move to the 1.0650 level, so the short-term play should be BUY on dips.
Additional ThoughtsAUDUSD is a very slow moving currency pair. If the release hits our deviation, we may have to jump in sooner than later… We could see very little retracement, if any, if we get a huge surprise in the market. It is also important to consider the low liquidity market condition as well.

Currency Trading in the Forex and Future Markets - Carley Garner

Book : Risk Management in Forex Markets :Indian Perspective - Ravichandran Krishnamurthy

Book : The little Book of Currency Trading - Kathy Lien