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Forex Signal (Wed, September 8 2010, 9:00am NY Time EST) - CA BOC Interest Rate

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Sep 7, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    Bank of Canada (BOC) will once again meet for their Overnight Rate (Interest Rate) and the decision will be announced today at 9:00am sharp. Along with the rate decision, BOC Carney will also announce a Rate Statement to further explain today’s decision. Here’s what analysts are expecting:

    9:00am (NY Time) CA BOC Rate Decision Forecast 1.00% Previous 0.75%
    ACTION: USD/CAD SELL 1.00% BUY 0.75%

    The Trade Plan

    BOC (Bank of Canada) will be hiking its Overnight Rate as the majority of analysts agree (14 out 20 as surveyed by Bloomberg). BOC is likely to remain optimistically cautious in its tone but the overall market is expecting a rate hike.

    However, since this rate decision is not perceived as a "done deal", it is possible that we'll see market react to both possibilities, therefore we would be looking to BUY USD/CAD if BOC decides to leave rates unchanged and SELL USD/CAD if BOC decides to hike as expected.

    I'll be trading this release using Spike Trading method as the odds for either possibilities are high, therefore it is almost guaranteed that we'll see strong market movement immediately after the release.

    For more information on my Spike trading method, please read:
    Henry's News Trading Method

    The Market
    As CAD gained across the board last Friday after NFP release showed the underlying market sentiment that a better U.S. economy is likely to ease BOC's concerns over global uncertainty, which increases the probability for BOC to hike rates today.

    As a matter of fact, Credit Suisse is predicting about 65% of probability for a rate hike today; however, there is 35% of possibility that BOC may just hold rates unchanged and adopt a wait-and-see stance for the time being.

    Additional Thoughts
    BOC has been on target with its monetary policy and the series of rate hikes since June has been done in such a way that avoided parity level on the USDCAD pair. This may be another opportunity to BOC to hike interest rate and at the same time warn the market over future uncertainty, which will make CAD less strong, thus keeping the volatility to a minimum.

    On the other hand, we are also seeing the economic growth in the 2nd quarter slowing, along with negative job data. With US economic outlook lagging, BOC may pause for the time being...

    Since both outcomes have merits, market will move after the rate decision, and the idea is to get in and hold on to the trade as USDCAD usually doesn't retrace much.

    Pre-News Considerations
    I'll be looking to SELL USD/CAD prior to the release, from recent highs.

    Historical Chart & data for BOC Rate Decision



    P.S. I've decided to skip the IVEY PMI today. I think we should focus on BOC only...
    #1 Henry Liu, Sep 7, 2010
    Lasted edited by : Sep 8, 2016
  2. lidiomozi

    lidiomozi Recruit

    Aug 25, 2010
    Likes Received:
    Dear Mr. Liu

    Thank you very much for your efforts in helping us to trade news.

    I ask you why you are going to SELL USD/CAD in advance, when the latest incrementing interest rate events show that USD/CAD will rally?
    Aren't you convinced that BOC will rise their rate?

    Thanks for the attention.
    Best regards.

    Lidio Mozi
  3. Huwee

    Huwee Corporal

    Jun 1, 2010
    Likes Received:
    Hi Lido,

    You would close your SELL position before the news is announced (maybe a good 30-60 minutes before).

  4. Jose L Ojeda

    Jose L Ojeda Recruit

    Oct 27, 2008
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    Yeahhh made 50 pips!!! Thanks Henry!!! You ROCK!!!
  5. swingfiddle

    swingfiddle Private

    Aug 17, 2010
    Likes Received:
    yeah baby!

    +33 pips on the pre release!
    +21 pips on the spike!
  6. satheesh82

    satheesh82 Recruit

    Sep 4, 2010
    Likes Received:
    Forex Signal (Wed, September 8 2010, 9:00am NY Time EST) - CA BOC Interest Rate> Repl

    Hi Liu,

    Today is my first gain of +30 Pips after losing of 5000$ .This gain is because of you..Hate off too u..For FPA tooo

  7. Simon Edwards

    Simon Edwards Corporal

    Jun 13, 2010
    Likes Received:
    I need help....

    I'm getting hammered by Slippage..

    I'm currently trading with Forex.com.

    this is what happened.

    Trade on the release as soon as the report is out , Set to allow deviation by 20 pips.

    2010.09.08 13:00:00 '10557825': instant sell 2.00 USDCADFXF at 1.04890 sl: 0.00000 tp: 0.00000 (1.04660 / 1.04760), 23 price changed

    Got my my trade in on the nose , Got a requote and game over.....

    the requote came in at 23pips.....i missed the trade because of 3 PIPS!!!!!

    so i need to know if this is normal , if not i need some good recommendations for a broker with low slippage.....

    i opened the account with forex.com because they are based in London and if they messed me aout i can go to their office and get stroppy.....

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