On Friday we had positive Retail Sales from the US. Retail sales rose 0.5% in September and that was the highest in 3 months. It came as no surprise really if things are observed from an employment perspective. Though last month’s payrolls were not upto expectations, it was still above the average figure of 180K if annualized. That’s not all, wages have been showing modest improvement over the last quarter giving Americans a reason to loosen their purse strings and spend more.
Evaluating this release, there are solid reasons why the Feds should go ahead and tighten, a position which is resonating with other Fed governors-from last week’s minutes, more governors were hawkish. Household spending is on the rise, the Atlanta GDP tracker is expecting the economy to expand by at least 2% in the 3rd quarter and that’s not all, labor conditions are expected to improve in the run up to the election.
To the charts and price seems to be going up after Friday’s release at least in the short term. Stochastics is swinging in from the oversold position in the daily chart and it is in tandem with the 4HR chart. Overly, the Asian session and Early European session has been trending higher and a correction should come anytime as we approach the NY session.
My over all view is to remain bearish and sell with every retracement towards the 0.713 level in the 15 min chart where I look to initiate a short. 0.713 remains an important level since it was last week’s highs.
So today I trade as follows:
Sell Limit: 0.713
Stop Loss: 0.717
Today’s major economic release is to watch out for New Zealand CPI expected to come at 0.0 vs 0.4% from the second quarter. Watch this at 21:45 GMT today.
Have a good trading day