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Forex Signal (Fri, July 30 2010, 8:30am NY Time EST) - CA GDP m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jul 29, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    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).

    For more information on my trading method:
    Henry's Retracement Trade Method.

    The Market
    As 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.

    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 Consideration
    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.”

    Historical data and charts for CA GDP m/m.

    Thanks,


    [​IMG]
     
    #1 Henry Liu, Jul 29, 2010
    Lasted edited by : Sep 8, 2016
  2. kgblock

    kgblock Recruit

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    Thanks to two lots, I earned 12 pips per 3 minutes.
    Traded live. But I traded a pair of CAD / JPY
     
    #2 kgblock, Jul 30, 2010
    Last edited: Jul 30, 2010
  3. DFW

    DFW Private

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    New Here

    Hello Henry !!

    I enjoyed your story about the light bulb coming on and trading news after so many losses. That was most encouraging.

    Trading news is fun as I found out with the Europe Bank Stress Test results last week. I got your first e-mail this morning and tried the Retracement on the USD/CAD. I watched the spike up and then sold the USD....(to soon) as it climbed before the Retracement started. Looks like I sold to soon also but with a profit as the D continued downward.

    If you have time would you recap this trade that happened today and how a pro traded it?

    I will continue to study your advice and I am looking forward to your e-mails.

    Thank You Sir,

    DFW
     

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