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Forex Signal (Fri May 6 2011, 7:00am NY Time EST) - CAD Employment Change

Discussion in 'Current Forex Trading Signals' started by Henry Liu, May 5, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    We’ll be getting the Canadian Employment Change release number tomorrow, here is the forecast:

    7:00am (NY Time) CAD Employment Change Forecast 18K Previous -1.5K
    Unemployment Rate 7.7%

    The Trade Plan

    The Canadian Employment Change report will be released at 7:00am sharp today. What I am looking for is a minimum deviation of around 30K, or the difference between the Forecast number (18K) versus the actual release number; if we get a positive 48K of release, we should see demand for the CAD rise, therefore we should SELL USD/CAD; however, if we get a negative number, such as -12K or worse, we should see some weakness in the CAD, and that will be my cue to BUY USD/CAD pair.

    I’ll also pay close attention to the unemployment rate, which stands at 7.7%. As long as this number does not conflict with the Employment Changes, we should follow the direction of the news release. If we get a conflict, such as better Employment Changes but higher Unemployment Rate, then we’ll need to look at the context of the market before taking the trade.

    I’ll be looking to trade this release using my after-news Retracement Method. To find out more about my trading system, read:
    Henry Liu's Trading Method

    The Market
    The overall outlook for the Canadian Job Market is positive. There is an estimated forecast of 15,200 new jobs while the unemployment rate remains at 7.7%. With the IVEY PMI showing a high expected outcome, speculators shouldn’t be suprised to see a release stronger than forecast.

    USDCAD has been gaining on the back of the highest crude oil prices since 2008 and is continuing supported by the geopolitical situation in Libya.

    Additional Thoughts
    USD/CAD is a slow moving currency pair, it will move on a strong deviation, but retracement is usually non-existent or very small… Therefore, if we get a strong release, especially when it is going with the pre-market trend, a sooner than later entry should add more pips to your account. Expect to see a spike down –> stall —> another spike down…

    Pre-news Considerations
    There are no pre-news considerations for this release…

    “Measures the change in number of employed people during the previous month. A rising trend has a positive effect on the nation’s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.”

    Historical Chart and Data for CAD Employment Change m/m


    #1 Henry Liu, May 5, 2011
    Lasted edited by : Sep 8, 2016

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