Henry Liu
Former FPA Special Consultant
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We’ll be receiving the monthly GDP release from Canada today. Here’s the forecast:
8:30am NY Time Canada GDP m/m Forecast 0.0% Previous 0.5%
ACTION: USD/CAD BUY - 0.2% SELL 0.2%
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 0.2% or higher… With recent uncertainty in the general market, a strong surprise in this GDP number may be the catalyst we need to see more volatility in CAD.
For more information on my trading methods, please read:
Henry Liu's Trading Method
The Market
GDP is a measurement of the “economy” as a whole and it has a tremendous impact on the official interest rate. However, Canada releases its GDP on a monthly basis, which diminishes chances for surprise. As a matter of fact, CA GDP has not been a very tradable release due to the most in-line with expectation figures.
After recent economic gains in the last few months, economists expect a weak GDP report. The slowing GDP after months of healthy gains reflects a weakness in exports and manufacturing. On the flip side, Canada will report a moderate gain in retail spending while quarterly growth is projected to be at around 4 %.
Gains in the USD/CAD were shortlived and prices are expected to drop below 0.9500.
On a weaker than expected GDP release, market could consolidate recent CAD rally as traders protect their profits.
Additional Thoughts
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
No Pre-news for this release…
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.”
Historical Chart and Data for CAD GDP m/m
Thanks,
8:30am NY Time Canada GDP m/m Forecast 0.0% Previous 0.5%
ACTION: USD/CAD BUY - 0.2% SELL 0.2%
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 0.2% or higher… With recent uncertainty in the general market, a strong surprise in this GDP number may be the catalyst we need to see more volatility in CAD.
For more information on my trading methods, please read:
Henry Liu's Trading Method
The Market
GDP is a measurement of the “economy” as a whole and it has a tremendous impact on the official interest rate. However, Canada releases its GDP on a monthly basis, which diminishes chances for surprise. As a matter of fact, CA GDP has not been a very tradable release due to the most in-line with expectation figures.
After recent economic gains in the last few months, economists expect a weak GDP report. The slowing GDP after months of healthy gains reflects a weakness in exports and manufacturing. On the flip side, Canada will report a moderate gain in retail spending while quarterly growth is projected to be at around 4 %.
Gains in the USD/CAD were shortlived and prices are expected to drop below 0.9500.
On a weaker than expected GDP release, market could consolidate recent CAD rally as traders protect their profits.
Additional Thoughts
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
No Pre-news for this release…
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.”
Historical Chart and Data for CAD GDP m/m
Thanks,
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