[B][U]Trading the News: US Advance Retail Sales[/U] [/B]
[B]What is Expected[/B]
Time of release: [B]08:30 EST, 12:30 GMT 7/13/2007[/B]
Primary Pair Impact : [B]EUR/USD[/B]
[B][U]Effect of US Advance Retail Sales on EUR/USD For Past 3 Periods[/U][/B]
[B]How To Trade This?[/B]
The US Advance Retail Sales report has proven relatively straightforward to trade through its past three releases; short-term price action has shown reasonable price extension on strong surprises in the data. A notable exception was seen on June?s report, however, as the dollar failed to rally on an impressive Retail Sales gain. Previous instances nonetheless leave hope for a similarly profitable result in the upcoming release, with incredible USD tumbles leaving scope for a retrace on a strong report.
The best profit potential arguably exists to the dollar-long side, leaving us to trade positive surprises in the consumer spending data. If numbers in both the headline and Ex-Autos measures come significantly above consensus estimates, the trader may look to go short the EURUSD on confirmation of a five-minute decline. Stops shall be set comfortably above immediate swing-highs, while initial profit targets should be set a similar distance away to the bottom-side.
Extended EURUSD gains leave less scope for greenback losses, but we will nonetheless trade disappointments in the data… As such, we will look for a poor Advance Retail Sales result to drive solid price extension through intraday trade. If both the headline and Ex-Autos numbers come below consensus estimates, the trader may look to go long the EURUSD on confirmation of a bullish five-minute move. Stop losses should be set below immediate swing-lows, while initial profit targets should be eyed a similar distance away to the topside.