US retail sales morning on USDJPY, the range plan and what I'm skipping

[Fairman]

US retail sales morning on USDJPY, the range plan and what I'm skipping

retail sales data is due in the US morning and USDJPY has been in a fairly tight range since Tokyo. I'll post what I plan to do and not do.

I'm not trading the release, no matter how clean the chart looks beforehand. What I do beforehand is mark the Tokyo and London highs and lows and the nearest round numbers on M5. The range is narrow, so a break is likely, but the direction is anybody's guess.

After the number, I give it a good fifteen minutes. If price breaks one side and holds above or below on two or three M5 closes, I'll look for the retest. Stop goes inside the range, on the other side of the level I broke. If it sweeps both sides, I stay out.

I'll also keep the size small. USDJPY moves quickly after data and the spread can be wide for a while. I'd rather take one good trade than three scrappy ones.

[Fairman]

Round numbers on USDJPY are worth extra attention on data days. When the range is tight and sits just under a big figure, a break often runs straight to the figure and stalls there. I mark those before the release because they change where a sensible target is. If the break would only get me to a round number a few pips away, the reward is too small and I let it go. If there is space to the next level, the retest trade is more interesting.

[Fairman]

Worth mentioning that retail sales can be revised along with the headline, and sometimes the revision moves the market more than the main number. That is one reason the first spike can reverse. The fifteen minute wait handles most of that, because by then the market has digested the full release. I also look at whether the move is holding into the US cash open, since that often confirms or kills the direction. Waiting for two or three M5 closes beyond the level is a good filter for that.