We’ll be receiving GDP release from Canada today along with US Adv. GDP q/q, I’d suggest to concentrate on the U.S. release first, if there is no trading opportunity there, then come back and look at the Canadian release. Here’s the forecast:
8:30am NY Time Canada GDP m/m Forecast 0.1% Previous 0.0%
ACTION: USD/CAD BUY -0.2% SELL 0.4%
The Trade Plan
I’ll be looking to BUY USD/CAD if we get a -0.2% or lower release, and SELL USD/CAD if we get a 0.4% or higher… With recent strength in CAD due to the general weakness in the USD and rise in demands for commodities, a stronger GDP should definitely add to the bullishness of the CAD. I’ll be looking for a Retracement Trade Method for this release, however, with US GDP also scheduled at 8:30am today, we’ll take this trade only when there is no conflict (better CAD release and better USD release = conflict).
Because GDP is basically the measurement of the “economy” as a whole and it certainly has a tremendous impact on the official interest rate, because better GDP equals to higher inflation, and higher inflation means higher interest rate. However, today’s CAD GDP is likely to be overshadowed by the US release. I expect to see CAD remain in a tight range today.
Important Observation: USD/CAD is my official pair for this trade, and this pair does not give up retracement easily. In the event that we get a strong release, expect USD/CAD to spike, stall, and then spike again. We may see some limited retracement, if any. The strategy to trade this release is usually just get in as soon as possible and let it ride.
Pre-news Possibilities:
Retail Sales in Canada came out worse than expected, but employment is at all time high. Crude Oil has gained somewhat, so based on these releases, I expect to see some strength in the CAD; a SELL USD/CAD trade could be justified if USD/CAD tests recent highs (1.0390), using a 40~80 pips of profit target.
Definition
GDP is defined (by wikipedia) as: “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.”
Please watch this live video from my previous CA GDP trade:
Related posts:
- Forex Trade Plan & Video For Canada Employment Change 08/06/10
- Canada GDP (Gross Domestic Product) m/m 10/30/09
- Forex Trade Plan And Video For RBA Cash Rate Decision 08/03/10
- Canada GDP m/m 11/30/09
- Forex Trade Plan & Video For UK Retail Sales 07/22/10
- UK 2nd Quarter Prelim GDP Analysis & Video 07/23/10
- Forex Trade Plan For CA Core CPI m/m 08/20/10
- Forex Trade Plan For AU Retail Sales 08/30/10
- Forex Trade Plan For Uk BOE Rate Decision 10/07/10
- BOC Overnight Rate Decision (Interest Rate Decision) 12/08/09
{ 4 comments… read them below or add one }
Hei Henry
First i like to thank you, for a nice homepage and for sending me newsletters-
A little bit about my self – i’m 37 years old, from denmark and working part-time with truckdriving.
Rest of my time is dedicated to my family, i have a nice girlfriend and 2 boys, the youngest is 1 year and the oldest is 4 years old.
I got my interess for trading forex by one of my freinds, for about 7month ago, i downloaded a platform from SAXO bank, and tried there demo in a month, with no succes, i loss all my money, fortunately it wasn’t real money, i decided to learn a lot more about trading forex,
so i joint a course here in denmark, but i also try to find everything about forex on the internet, and there i found your homepage.
I admit that i don’t understand everything about your concept, i’ll really want to learn more about trading the news, and my question is – can i get the course in danish – cause many important information will be lost in translation.
I really hope you can help me.
Best regards
Lars Toft
Denmark
Tel: +45 27 62 06 97
E-mail: lpt@live.dk
Hi Liu,
thank you so much for your dedicated work and participation. I am quite a new trader on fandamentals, and even its more complicated then I was teached by others (who just take a 2 contradicted trades with some simple rules- many times disapointing), its worth the effort. also your explnations accompanying enrich my overall understanding of the market. I do spread the message as you asked, to my colleague group on Skype, to let them benefit also from your wisdom. hope your work will be continued free of charge [ as we still in a very painful journey so to speak...-;) ]
best regards and fruitfull tradings
Esra
Henry,
Thanks for the great analysis, I have been following you for a few weeks and since, I have been achieving a priceless fundamental understanding for the market. So once again that for all of you work.
I was just viewing the video posted above, I having a bit of trouble understanding why did you buy when the Actual number was inline with the forecast. How I am looking at it is…the actual & forecast was still better for the CAD then the previous number. Which I would think would be good for the currency driving the UC downward.
I would like to know what I am missing so it can give me a better understanding of future reports.
Thanks in advance.
This is basically taking the context of the market into news trading consideration. It is important that we don’t buy or sell just because of the number, if we are close to support and resistance, or there has been a strong pre-market sentiment, all of these should be factored into your trading. It sounds harder but its really not that difficult.