Trading the News: U.K. Retail Sales
U.K. Retail Sales are expected to increase for the third consecutive month in July and a pickup in private sector consumption may spur a bullish breakout in the GBPUSD as it remains one of the leading drivers of growth.
What’s Expected:
Time of release: 08/15/2013 8:30 GMT, 4:30 EDT
Primary Pair Impact: GBPUSD
Expected: 0.6%
Previous: 0.2%
DailyFX Forecast: 0.2% to 1.0%
Why Is This Event Important:
Should household spending pickup in July, a positive sales report may raise the scope of seeing the Bank of England (BoE) normalize monetary policy ahead of schedule, and the British Pound may continue to outperform against its major counterparts amid the shift in the policy outlook.
Bullish Argument/Scenario
The pickup in wage growth along with the ongoing improvement in consumer sentiment raises the scope of seeing a marked rise in retail sales, and a positive print may spark a growing rift within the BoE as Monetary Policy Committee member Martin Weale dissents against the majority.
Bearish Argument/Scenario
However, sticky inflation paired with the slowdown in private credit may prompt U.K. households to scale back on spending, and BoE Governor Mark Carney may keep the door open to expand the balance sheet further in an effort to encourage a stronger recovery.
How To Trade This Event Risk
Should U.K. retail sales increase 0.6% or greater in July, we will need to see a green, five-minute candle following the release to consider a buy entry on two-lots of GBPUSD. If the market reaction favors a long trade, we will set the initial stop at the nearby swing low or a reasonable distance from the entry, and this risk will establish our first objective. The second target will be based on discretion, and we will move the stop on the second-lot to cost once the first trade hits its mark in order to protect our profits.
On the other hand, a dismal print should keep the GBPUSD within the downward trend from earlier this year, and we will implement the same strategy for a short pound-dollar trade as the long position laid out above, just in the opposite direction.
Potential Price Targets For The Release
Za iskusnije trejdere,ako neko prevede korektno tekst I objasni ovu vrstu trgovine.Hvala.
