NZ Retail Sales release is a quarterly release and since it is released quarterly, it has the potential of surprising the market, making it a very tradable report… With that being said, considering that the RBNZ has recently contemplated cutting interest rates, we could see further speculative selling of kiwi if we were to get a significant miss today…
6:45pm (NY Time) NZ Retail Sales Forecast 1.6% Previous 1.7%
DEVIATION 0.5% (ACTION: NZD BUY 2.1% SELL 1.1%)
The Trade Plan
NZ Retail Sales release is the measurement of consumer spending in the retail sector, as it reflects the strength of the economy and the strength of consumer spending. We'll be looking for a difference (or deviation) of at least 0.4% ~ 0.6% from the forecasted number; therefore a positive 2.1% (or better) will be a somewhat bullish signal for NZD and a 1.1% (or worse) will be a bearish signal for NZD. Our focus will be on the Headline release, not on the Core Release… However both releases shouldn't conflict, or it will be an automatic no trade.
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: NZD/USD.
Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.