Trade Plan For Canada Employment Change 06/04/10

We’ll be getting the Canadian Employment Change release number tomorrow, and as a fundamental and news trader, here are some of the important factors that I’d be looking for in this release:

7:00am (NY TIme) CA Employment Change     Forecast 17K    Previous 108.7K
 (Unemployment Rate     8.1%)
ACTION:             BUY -15K       SELL 47K            USD/CAD

Canadian Employment Change report will be release at 7:00am sharp today, and it is the first of two tradable high impact news releases for this Friday.  What I am looking for is a tradable deviation of 30K, or the difference between the Forecast number (17K) versus the actual release number; therefore if we get a positive 47K of release, we should see demand for the CAD rise, therefore we should SELL USD/CAD; however, if we get a negative number, such as -15K or worse, we should see some weakness in the CAD, and that will be my cue to BUY USD/CAD pair.

I’ll also pay close attention to the unemployment rate, which stands at 8.1%, same forecast as last month’s release.  As long as this number does not conflict with the Employment Changes, we should follow the direction of the news release.  If we get a conflict, such as better Employment Changes but higher Unemployment Rate, then we’ll need to look at the context of the market before take the trade.

With BOC just started the rate tightening cycle this week, CAD may offer slightly better outlook than other majors, therefore my bias is to SELL USD/CAD if and when the market makes a surge to the upside.

DEFINITION

“Measures the change in number of employed people during the previous month. A rising trend has a positive effect on the nation’s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.”

Related posts:

1. Forex Trade Plan & Video For Canada Employment Change 08/06/10
2. How to trade Canadian Employment Change 04/09/10
3. Forex Trading Strategy For Canada Employment Change 07/09/10
4. Canada Employment Change Forex Trading Strategy 09/10/10
5. Forex News Trading Canada Employment Change 11/05/10
6. Forex News Trading Canada Employment Change 02/04/11
7. Forex News Trading Canada Employment Change 01/07/11
8. Canada Employment Change 02/05/10
9. Forex News Trading Canada Employment Change 03/11/11
10. Forex News Trading Plan For CA Employment Change 10/08/10

Tagged as: Canada Employment, Canadian Employment, Consumer Spending, currency, economic health, Employment, employment change, Employment Changes, employment release, Employment Sector, GDP, high impact news, Job Creation, Large Portion, news event, NFP, pips, Profit Target, retracement, Unemployment Rate