We’re also getting the Core Retail Sales release from Canada today, let’s look at the forecast:
Core Retail Sales Forecast 0.5% Previous -1.2%
ACTION: USD/CAD BUY -0.1% SELL 1.1%
The Trade Plan
I’m going to be looking for a deviation of 0.6% for this news. Since the forecast is at +0.5%, if we get a -0.1% 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 1.1% of actual release, I’ll be looking to SELL USD/CAD.
BOC hiked rates as expected sending out a bullish message yesterday, however BOC Carney issued a cautious statement which mentioned the lack of confidence in Europe and the fact that BOC will evaluate global market condition instead of on the basis of inflation alone in their future monetary policies. This type of positive/negative one-two punch message is going to keep USD/CAD in a tight range, from the lows of 1.0280 to the highs of 1.0680. I believe we should trade the ranges by selling from the top and buying from the bottom.
Recent Employment Change from Canada showed a surprisingly 93.2K of new jobs created, this is surely going to add expectations for better release today. My bias is to SELL USD/CAD Note:You can take a pre-news trade sell USD/CAD during European session, but you have to close the trade before the 8:30am release, or close part of your order to cut down on risk exposure.
Important Observation: USD/CAD is the recommended pair, if we get a strong deviation, don’t expect much retracement as this pair should move steadily and gradually until after the European market close, which is around 11:30am EST.
If we get a good release, it is justifiable to jump in a trade even if the market didn’t retrace back within 20~30 pips of the pre-release level, because usually USD/CAD pair will spike, retrace about 20 pips from the spike high, and then retest the spike highs and make a breakout. Just be mindful of the ranges (1.0280 & 1.0680), as long as we are not testing them, market should push this pair along.
Definition
Our focus is on the Core Retail Sales release and not the headline Retail Sales release; Retail Sales releases from Canada is a month on month release, and basically it’s a measurement of the activities at the retail level of Canada, and the Core release is the same Retail Sales but excluding most volatile components, Automotive Components, which makes up about 25% 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.
Here’s a video of my live trade on CAD Retail Sales:
[flv:http://www.newsprofiteer.com/092209-cadretail/092209-cadretail.mp4 480 360]
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{ 3 comments… read them below or add one }
Hello, Mr. Henry,
How can i contact you personally ? it so importan to my live, please.
Dear Henry, why usd/cad didn’t move that much despite our deviation being hit?
Market was in a risk appetite frenzy, therefore demand for CAD (commodity currency) outweighs the negative report.