I am planning to trade the USD Retails Sales news event. My plan is to make a news breakout trade and catch a move in either direction.
Instrument
I have selected the EUR/USD currency pair because of the following reasons,
A) It is a currency pair with big liquidity
B) When comparing the currency strenght index, the EUR is quite a bit weaker than USD which makes a big move likely.
C) BOE's Governor Carney will hold a speech 45 minutes after the news release that might affect the GBP, hence the GBP/USD pair is not so attractive.
Trade setup
I have no really expection of the direction so my setup is bi-directional.
I have reviewed the chart ahead of time and identified near time support and resistance levels.
With those levels in mind, I have identified possible entry levels around the current price.
About 20 minutes before the news release I added buy stop and sell stop orders around the price at resistance and support levels.
Since the average historical move for the USD retail sales new event is about 80 pips I decided to put my profit targets within 50 pips from the current price.
Outcome
The retail sales number came in a lot worse than expected and caused a big USD sell off. This triggered my long position at @1.17968. The EUR gained about 50 pips in less than 15 minutes and my profit target @1.18265 was hit. My total profit for this trade was 31 pips.
