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Forex Signal (Tue November 23 2010, 7:00am NY Time EST) - CA Core CPI m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Nov 22, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    CPI or Consumer Price Index is the direct measurement of inflation, and it is a high impact release that has long term effects on CAD. It is undoubtedly a high impact release that will be the focus of early NY trading session today. Here is the forecast:

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

    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 0.4% 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 is hovering around the 1.0200 level looking for direction. With current market focusing on USD recovery, USDCAD is expected to move upwards in my opinion... However, news catalyst and Crude Oil prices are needed before we see that strong movement, therefore this news is going to be widely watched.

    However, with BOC taking a cautious stance lately and considering the general track record of this news event, we may not see strong momentum or follow-through unless we get our deviation...

    Additional Thoughts
    USD/CAD is a very slow moving currency with very little retracement. We may need to jump in a little sooner, but market should spike in the direction of the news, stall, and then spike again. Usually the second spike will give us the most pips.

    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, Nov 22, 2010
    Lasted edited by : Sep 8, 2016
  2. Ahmed H

    Ahmed H Private

    Jun 19, 2010
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    hit the deviation but still got off with -20 pips..
  3. PipDog

    PipDog Corporal

    Jul 25, 2010
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    Move went opposite direction of the Risk Aversion...again. Remember, Risk Aversion equals USD up. It's always wise to look at the stock markets/futures before deciding how to trade.

    BTW, I played the reversal on the risk sentiment and got 12 pips. Not a killing, but....

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