Forex Signal (Tue December 21 2010, 8:30am NY Time EST) - CA Core Retail Sales m/m

[Henry Liu]

This is the last tradable news (in my opinion) for the year. As we get close to the end of the week, market liquidity will be dangerously low, which means it's best to stay out of the market... And once again, happy holidays and a prosperous 2011! I'll be back in 2011 to continue with our Forex Signals.

Here's Forecast:

Core Retail Sales Forecast 0.8% Previous 0.4%
ACTION: USD/CAD BUY 0.2% SELL 1.4%

The Trade Plan
I’m going to be looking for a deviation around 0.6% for this news. Since the forecast is at +0.8%, if we get a 0.2% or worse, it would be negative for the CAD and we’ll be looking to BUY USD/CAD; however, if the opposite is true, or a 1.4% of actual release, I’ll be looking to SELL USD/CAD.

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

The Market
Market is going to be trading in lower than normal liquidity, therefore it is best to stay out unless we get out tradable deviation.

With both USD and CAD remaining par with each other, the direction for USDCAD may not be clear unless we get a strong surprise... however, my long-term bias is still LONG for the pair.

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 11:30am EST.

Pre-news Consideration
USDCAD may be stalling at the current level, but judging the general market sentiment we may not see much movement prior to the 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 & Data Of CA Core Retail Sales

Thanks,

 

[mohan02]

Thank you. Forexoholic Henry

Hi Henry,

Thanks for the elaborate analysis. You must not be just be a "forexoholic", you must also be a very generous and helpful person in nature to take the trouble to write in such details for others' benefit.
As a newbee I really do appreciate your effort and look forward to more thanking opportunity. You already have about 500 people following and taking your advice. Great Job!

Merry Christmas!

 

[ecafyelims]

Henry, are you still going to post the upcoming signals? They're pretty important to me for planning the week.