Ahead Of NZ's Retail Sales Report

NZ Retail Sales release today could add more momentum to the downside for Kiwi as recent strength in USD and the comments from RBNZ’s Wheeler on currency intervention aren’t exactly positive for the NZD. Also since NZ Retail Sales is a direct reflection of the economy, this release is always considered as an high impact release… Here´s the forecast:

6:45pm (NY Time) NZ Retail Sales Forecast 0.9% Previous 2.1%

DEVIATION 0.5% (ACTION: NZD/USD BUY 1.4% SELL 0.4%)

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 1.4% (or better) will be somewhat bullish signal for NZD and a 0.4% (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: NZDUSD.

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 “NZ Retail Sales 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 pay close 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.”