There are two such leading indicators. They are BTW-UBS Chain Store Sales and Redbook Chain Store Sales. Every Tuesday these two indicators are released. The BTW reports cover exclusively sales at big retailers. Redbook reports on big retailers and also department stores. When the weekly numbers are extremely good or extremely bad it's a good indication of what consumers are doing right now and as such has important implications going forward, especially when a clear pattern over two or three weeks emerges.

Smart investors are all over this new information, staying current and adjusting their positions to reflect the more current outlook. Because the media does not make a big splash about it, the subtle price changes in the U.S. dollar go practically unnoticed.

While these relatively minor price changes are unlikely to change U.S. dollar direction on the day even, getting into the next short-term price move early is the kind of "leg up" type of trading that can cause a trader to get his or her day off to a winning start and provide the money and confidence to parlay a small gain into a great P&L trading day.

As a caveat, store sales are only a small percentage of total retail sales and are therefore far from a holy grail. However, its very current information on the spending patterns of consumers and that's very important information which has far reaching ramifications.

EXAMPLE 2:

Without a doubt, the U.S. monthly employment report spectacularly moves the currency markets; the change in non-farm payroll employment is what the market focuses on. Being a leading indicator, the weekly jobless claims number has been getting a lot of press, and therefore a currency market mover. There are two monthly reports that don't get the press but are good indicators of current employment situation; they are Challenger Job-Cut Report and Help Wanted Index.

Challenger Job-Cut Report states the number of announced corporate layoffs. While some of these announced layoffs might never come to pass, knowing the aggregate outlook for "block" layoffs is an important indicator of employment trends. The report also lists the layoffs by industry, alerting investors of possible "keeping up with the Jones" layoffs to be announced by other companies in the same industry or industries that depend on other industries.

Help Wanted Index compiles data on how many lines of help-wanted advertising appeared in about 50 major newspapers from all over the United States. In the current environment of a jobless recovery, knowing how much advertising is being done is a leading indicator of the jobs created portion of the monthly non-farm payroll employment number. Changes in this monthly indicator will cause some immediate stock and currency position adjustment. Take advantage of it.


Summary
There are many subtle fundamental indicators that don't get headline press and therefore go unnoticed by most small investors. To list all of them here is beyond the scope of this article. The big boys are all over these hints of the current "big picture" and some of them adjust their currencies immediately based when the info is released. Learning to day trade these tier 2 indicators can be easy money.


Note:

Jimmy Young is a seasoned institutional forex trader having 20 years of experience with different banks. He headed up bank FX dealing rooms. He is FX profitability consultant to major European private bank. He manages funds and also trades personal money. Between 1981 and 2004 he was a foreign exchange trader at following banks: Societe Generale, Julius Baer, Fuji Bank, Indosuez, Erste, Hill Samuel, Manufactures  Hanover, Paribas, European American. www.EurUsdTrader.com