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

Henry Liu

Former FPA Special Consultant
Messages
473
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

Thanks,





P.S. I've decided to skip the IVEY PMI today. I think we should focus on BOC only...
 
Last edited by a moderator:

lidiomozi

Recruit
Messages
2
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
 

Huwee

Corporal
Messages
92
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
Hi Lido,

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

Huwee.
 

satheesh82

Recruit
Messages
1
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

Regards,
Satheesh:)
 

Simon Edwards

Corporal
Messages
90
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 13:00:00 212.183.140.50 '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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