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Forex Signal (February 22 2011, 8:30am NY Time EST) - CA Core Retail Sales m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Feb 22, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    Retail Sales is usually a very tradable release as traders draw direct correlation between retail activities with economic health. Here's Forecast:

    Core Retail Sales Forecast 0.7% Previous 1.0%
    ACTION: USD/CAD BUY 0.0% / SELL 1.3%

    The Trade Plan

    I’m going to be looking for a deviation around 0.6% for this news. Since the forecast is at +0.7%, 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'll be looking to trade this release using my after-news retracement method. The idea is to wait for the release, wait for market to spike first, and then wait for a decent retracement before getting in. For more details on my trading method:
    Henry's News Trading Method.

    The Market
    USDCAD started to trade lower on speculation that current geopolitical situation in the Middle East may affect Crude Oil production. This has been the primary reason for the heavy appreciation of CAD.

    As far as fundamental point of view, CAD is a bit overvalued at the current level, and I believe if and when the geopolitical factor subsides, CAD will weaken significantly.

    Additional Thoughts
    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.

    Pre-news Consideration
    There is no pre-news trade for this release...

    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.

    Historical Chart & Data Of CA Core Retail Sales


    #1 Henry Liu, Feb 22, 2011
    Lasted edited by : Sep 8, 2016

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