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Forex Signal (Tue December 21 2010, 7:00am NY Time EST) - CA Core CPI m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Dec 21, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    Let me start by wishing everyone happy holidays and a prosperous new year, and may all of your wishes come true in 2011 :)

    Today is the last trading day for the year that matters as market liquidity has reduced significantly, it is best to stay on the sideline until 2011; however if we get a significant surprise in today's release, we should see market react with a bit of exaggeration, thus making this news a good trading opportunity. Therefore, today will be the last day for our Forex Signals for 2010.

    Here's the forecast:

    CA Core CPI m/m Forecast 0.2% Previous 0.4%
    ACTION: USD/CAD BUY -0.1% SELL 0.5%

    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 0.5% or better to SELL USD/CAD or a -0.2% or worse to BUY USD/CAD.

    I'll be looking for a after-news retracement trade for this release. I'll wait for the release, wait for the initial market move, and wait for a decent retracement before jumping in. For more information on my trading methods:
    Henry's News Trading Method.

    The Market
    USDCAD has been trading weaker during most of trading sessions on Monday, moving to as high as 1.0200 before retreating below the 1.0150 during late Asian session today.

    With Korean geopolitical tension easing, we could see some weakness in the USD, which may help CAD gain some strength during today's pre-news market trading.

    Additional Thoughts
    As stated before, with market liquidity dying down, it is best only to concentrate on news releases.

    Pre-news Consideration
    There is no pre-news trading for this event, especially with Retail Sales coming out in 90 minutes.

    “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.

    Historical Chart & Data of CA Core CPI


    #1 Henry Liu, Dec 21, 2010
    Lasted edited by : Sep 8, 2016
  2. automatedtraderfxpaul

    Jan 3, 2011
    Likes Received:
    Hi Henry, I've just joined this forum, I see you have big follow in this forum as a mentor, nice to meet you. I wish you great success in this year 2011.

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