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Forex Signal (Fri, July 23 2010, 7:00am NY Time EST) - CA Core CPI m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jul 22, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    CPI or Consumer Price Index is direct measurement of inflation, which is a high impact release that could have long term effect on CAD, it is undoubtedly a high impact release that will be the focus of early NY trading session. Here is the forecast:

    CA Core CPI m/m Forecast 0.1% Previous 0.3%
    ACTION: USD/CAD BUY -0.2% SELL 0.4%


    The Trade Plan
    We will be focusing on the Core CPI release today and our deviation for this release based on historical track record is 0.3%, therefore I’ll be looking for tradable figures of 0.4% or better to SELL USD/CAD or a -0.2% or worse to BUY USD/CAD.

    We'll trading this release using our after release retracement method. To read more about my trading methods:
    Henry's Retracement Trade Method

    The Market
    USD/CAD has been strengthening on the back of BOC rate decision, which was the second 25 basis points hike in a row. Even though BOC downgraded GDP forecast from 3.7% down to 3.5% for 2010, market still reacted with strong demand for the Canadian Dollar.

    Looking at today's disappointing Retail Sales from Canada, we saw very limited initial sell-off that was completely reversed in less than 90 minutes. Demand for CAD, AUD, and NZD remained high as risk appetite sentiment drove the broader market today. It is likely we'll see similar market reaction if we get a worse than expected release, as the long-term fundamental of the Canadian Dollar is still one of the best (if not the best) among all majors.

    Additionally, in today's BOC Monetary Report, Bank of Canada is calling for a gradual rate increase pending on the pace of recovery and inflation. Even though this does not guarantee a surefire rate hike, it's possible that expectation for the next rate meeting will be affected by this release, therefore a stronger release should definitely add to the demand (at least temporarily) of CAD.

    Additional Thoughts
    There is a very small window for this trade to work as market should be driven by the release alone from 7:00am to about 8:15am. If we do not get a decent retracement in the first 30 minutes of the release, its probably best to stay out of the market and take an early weekend.

    USD/CAD is a very slow moving currency with very little retracement. We may need to jump in a little sooner, but market should spike in the direction of the news, stall, and then spike again. Usually the second spike will give us the most pips.

    DEFINITION:
    “CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households(wikipedia).” It is also known as the “True Cost of Living”.

    Our focus is on the Core CPI, or CPI ex Energy and Food components, which provides a better picture of inflation without the seasonal factor.

    For historical charts and data of CA Core CPI m/m:
    Charts & Historical Data On CA Core CPI m/m


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Jul 22, 2010
    Lasted edited by : Sep 8, 2016
  2. luhaas

    luhaas Recruit

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    Source of news

    Hi Henry,

    thank you very much for the daily analysis. Their great!!!

    Please, where can I found a better place than ForexFactory.com to knew the news resources? Something at live time...


    thank you
     
  3. iamcad70

    iamcad70 Recruit

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    News releases

    Hello Henry,
    Does you know where one could access news releases in real time?
    Regards,
     
  4. luhaas

    luhaas Recruit

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    i have the same question


    thanks
     
  5. sonny77

    sonny77 Private

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    Hi.. HENRY,

    Thank you for your support in this week.
    May i know what is SNW means ? Sorry because i am a newbie.

    BEST REGARDS
     
  6. Swap

    Swap Recruit

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    alright now can someone tell my why news for cad came out negative but usd/cad spiked down for 40 pips?
     
  7. Huwee

    Huwee Corporal

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  8. Huwee

    Huwee Corporal

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    From a previous posting of Henry's:
    Hope this helps!

    Huwee.
     
  9. luhaas

    luhaas Recruit

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    thank you very much!!

    it will make big diference. i trye bloomberg but they just talk about the big releases. ;)
     
  10. sherby

    sherby Recruit

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    thank god i wasn't in this trade can anyone tell us why ???
    anyone got lucky in this one ??
     

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