We’re also getting the Core Retail Sales release from Canada today, and with the Core CPI being released just about 90 minutes earlier, it’s important to take the context of the market into consideration before planning for this trade. If we are trading at a support level on a better than expected CPI release, it is possible that market may not move much from this news even if our tradable deviation is hit… With that said, let’s look at the forecast for this news:
8:30am NY Time Core Retail Sales Forecast 0.5% Previous -0.1%
ACTION: USD/CAD BUY -0.1% SELL 1.1%
We’ll be concentrating on the Core Retail Sales release and not the headline Retail Sales release; Core Retail Sales release is a month on month release, and basically it’s a measurement of the activities at the retail level of Canada, but excluding most volatile components, Automotive Components, which makes up about 25% of the Headline Retail Sales release, and it varies seasonly. A better release generally means more consumer spending, which leads to better economy, thus better for its currency. And the CORE reading provides a far more accurate look of the actual economy.
I’m going to be looking for a minimum deviation of 0.6% for this release. Therefore if we get a 0.0% or worse, it would be negative for the CAD and we’ll be looking to BUY USD/CAD; however, if the opposite is true, or a 1.3% of actual release, I’ll be looking to SELL USD/CAD.
I should also mention that with USD trading at the highest levels against most major currencies, commodities have been under pressure, and that in turn is adding to the weakness of CAD for the last couple of weeks… However, with BOC on the verge of hiking interest rate, the proximity of Canadian economy to that of the U.S., and the relatively stable economy in Canada, we could see CAD diverge from other majors and hold its ground against USD and possibly strengthen, if we were to get strong Retail Sales today…
Related posts:
- US Core Retail Sales m/m 10/14/09
- US Core Retail Sales m/m 11/16/09
- US Core Retail Sales m/m 12/11/09
- Forex News Trading Plan For NZ Retail Sales 01/20/11
- Trading Plan For UK Retail Sales 06/17/10
- Forex Trading Plan For UK Retail Sales 04/22/10
- Forex Trade Plan For NZ Retail Sales m/m 07/13/10
- Forex News Trading UK Retail Sales 12/16/10
- UK Retail Sales m/m 01/22/10
- Forex News Trading NZ Retail Sales q/q 08/24/11
