Thursday October 23rd

Thursday, October 23rd, 2008 (4:30 a.m. New York Time) UK
On Thursday at 4:30 a.m. we are going to have UK Retail Sales m/m. It is hard to say if this is going to give a reliable move, and based on recent past experience I would be very careful with it. If you look at chart from August, we had 60 pips spike up on 1.0 deviation, but it was a very short living move and it retraced by 100%. Because GBP/USD is on extremely strong selling trend, perhaps buying at the spike might be extremely risky because traders may take advantage of the better price to sell again. It will also depend on where the price is right before the report. I think +/- 0.8 deviation should be enough to enter a spike trade if you have SNW but you must exit within seconds, regardless if you are on profit or loss. If it deviates by +0.8, I think selling at the top of the spike on GBP/USD may work well. If it deviates by -0.8, selling on the spike may work OK but I would be careful with buying against the spike. Perhaps small position would be OK to give a try and make a lunch money, but I really mean a small position because I don't feel like I want to buy GBP/USD, even at the discounted price. Obviously if the deviation is crazy, trading against the spike would be too risky and it is better to make some money on the spike and stay away from trading against the spike. Again, I will personally check the price level right before the report and then determinate what is the best strategy. Also, watch out for possible leaks - recently U.K. reports tend to move before the official announcement.

That's all for Thursday.