US Core Retail Sales is a high impact tradable release but since it is scheduled to be released with the Core CPI, market will undoubtedly look at both releases and since CPI is directly monitored by the Fed, it is likely to hit the market with more impact in the event of a surprise.
With the Fed scheduled to release economic projections, rate decision, FOMC statements, and a Press Conference later on in the afternoon, anything short of hitting our tradable deviation is an automatic “stay out”.
Here´s the forecast:
8:30am (NY Time) US Core Retail Sales Forecast 0.2% Previous 0.3%
DEVIATION: 0.5% (BUY USD 0.7% / SELL USD -0.3%)
The Trade Plan
The plan to trade this release is straight forward. We are going to wait for 0.7% release or better to BUY USD, or a -0.3% or worse to SELL USD. If we get a in-between release, we´ll need to look at the pre-release market condition and sentiment in order to make a decision, or just stay out of the market altogether.
We will trade this news release using after news retracement method, I will pay attention to both headline and Core Retail Sales figures, but my focus will be on the Core figure. Remember to use the recommended pair above and verify the pairs to trade 1 minute before the release, or you can just use the default pair of USD/JPY or EUR/USD.
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: EUR/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.
DEFINITION
“(Retail Sales Core) Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.”