How To Trade The US Data Today?

A few days ago, Mr. President-Elect Donald Trump made his first press conference since he got elected. What’s funny here is that he moved the market even though he did not go through economic discussions.

The Federal Reserve itself haven’t moved the markets as much as the new president did, which makes me think that traders should be more cautious when the President is speaking anytime in the next four years, more than what they Federal Reserve may announce in the coming months. Yet, volatility will be everywhere. This is the time when we as traders can catch good trades. In today’s article, we will look at the upcoming US data, how to read it and how to trade the news.

Retail Sales: Change in the total value of sales at the retail level. This is the earliest and broadest look at vital consumer spending data.

Core Retail Sales: Change in the total value of sales at the retail level, excluding automobiles. Traders need to keep an eye on this index more than the previous one.

Producer Price Index: Change in the price of finished goods and services sold by producers.

Core Producer Price Index: measures the change in the price of finished goods and services sold by producers, excluding food and energy. Traders also should keep an eye on Core data more than the general index.

University Of Michigan Consumer Confidence Index: Level of a composite index based on surveyed consumers. There are 2 versions of this data released 14 days apart – Preliminary and Revised. The Preliminary release is the earlier and thus tends to have the most impact.

Why Should Traders Follow These Figures?

Beginning with Retail Sales, It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

As for the Core Retail Sales, which is more important because automobile sales account for about 20% of Retail Sales, but they tend to be very volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends

Going into PPI (Producer Price Index), it’s considered as a leading indicator of consumer inflation – when producers charge more for goods and services the higher costs are usually passed on to the consumer.

The Core PPI though is also more important as Food and energy prices make up about 40% of overall PPI which tends to mute the importance of the Core data.

Finally, the University of Michigan (UoM) consumer confidence index is also considered as a leading indicator of consumer spending, which accounts for a majority of the overall economic activity, as it survey about 500 random consumers which ask the respondents to rate the relative level of current and future economic conditions according to their judgement.

Expectations

Indicators	Forecast	Prior
Retail Sales	0.5%	0.1%
Core Retail Sales	0.5%	0.2%
PPI	0.1%	0.4%
Core PPI	0.3%	0.4%
UoM Consumer Confidence	98.6	98.2

Looking at the table above, the expectations are somehow encouraging, these data are for the month of December, which is considered one of the best months for retail shops, therefore, every single number matters. Disappointment will have a notable impact on the markets. Moreover, rising prices and rising sales would mean that the Fed is on the right trade to raise rates again later this year.

However, what matters the most is the Consumer Confidence Index, especially after the elections outcome. The estimates are to rise further to 98.6, which would also be a positive signal that the average American is still looking for some better economic conditions in the future. In return, this would be another positive catalyst for the US Dollar

Therefore, traders are advised to look very carefully into the numbers, before deciding on their next trades. This might be one of the easiest days to decide on your next trade, its either black or white. Positive data means strong USD and vice versa.

Levels To Watch

Symbol	S3	S2	S1	Pivot	R1	R2	R3
EURUSD	1.0442	1.0506	1.0559	1.0623	1.0676	1.0740	1.0793
GBPUSD	1.1932	1.2040	1.2102	1.2210	1.2272	1.2380	1.2442
USDJPY	111.99	112.86	113.79	114.66	115.59	116.46	117.39
USDCHF	0.9958	1.0005	1.0057	1.0104	1.0156	1.0203	1.0255
USDCAD	1.2892	1.2960	1.3052	1.3120	1.3212	1.3280	1.3372
AUDUSD	0.7340	0.7383	0.7433	0.7476	0.7526	0.7569	0.7619
NZDUSD	0.6939	0.6992	0.7044	0.7097	0.7149	0.7202	0.7254