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Forex Signal (Fri May 20 2011, 8:30am NY Time EST) - CAD Core Retail Sales m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, May 19, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    Retail Sales is usually a very tradable release as traders draw direct correlation between retail activities with economic health.
    Here’s Forecast:

    8:30am Core Retail Sales Forecast 0.8% Previous 0.7%
    ACTION: USD/CAD BUY 0.3% / SELL 1.3%


    The Trade Plan
    I’m going to be looking for a deviation around 0.5% for this news. Since the forecast is at 0.8%, a reading of 0.3% 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.

    Let’s trade this release using my after-news retracement method. The idea is to wait for the release, then for market to spike first, and then wait for a decent retracement before getting in. For more details on my trading method:
    Henry Liu's Trading Method

    The Market
    High food and energy prices as well as a poor global recovery are the primary force behind the lagging recovery. The CAD began the week at its worst level against the US dollar and as a result investors are in risk averse mode. The Canadian economic growth has been stable as of recent regardless of inflation levels. The primary reason is their export market, primarily oil. Barrels have settled around the $100.00 mark, the first time in weeks. Yet, a diminshing global economy and the eurozone debt are waying heavily on forecasted export expectations.

    In essence, as long as oil prices hover at $100.00 dollars per barrell, the CAD shouldn’t gain too much strength. Barrell prices rose for the first time in weeks but don’t expect this to be a trend, just a slight booster for this month’s Canadian retail sales.

    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 12:30pm EST.

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

    Definition
    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 and Data for CAD Core Retail Sales m/m


    Thanks,


    [​IMG]
     
    #1 Henry Liu, May 19, 2011
    Lasted edited by : Sep 8, 2016

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