Forex Signals (Friday March 22, 2012 NY TIME 7:00am EDT) – CA Core CPI m/m

Stavro D'Amore

Former FPA Special Consultant

Please see my trade plan below.

CA Core CPI m/m
Forecast 0.3%
Previous 0.2%
Pair to trade: USD/CAD

Numbers we need:

Economical Impact: Critical
Typical Result: Good for currency
Occurrence: monthly, about 20 days after the month ends

About our Triggers:
CA Core CPI is forecasted to arrive at 0.3%. We are looking for a deviation of 0.2% on this trade. If we get 0.1% or lower I will look to enter a LONG position on USD/CAD and if we get 0.5% or greater I will go SHORT on USD/CAD. Should this report be triggered, we can expect to see about 50pips on the initial spike. We also have CPI m/m due to come out the same time and I cannot see this being a conflict.

NOTE: we are trading Core CPI. m/m

What is it? Why does the market care?
The Core Consumer Price Index (CPI) measures the changes in the price of goods and services excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation in Canada.

Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. The common way to fight inflation is raising rates, which may attract foreign investment.

A higher than expected reading should be taken as positive/bullish for the CAD.
A lower than expected reading should be taken as negative/bearish for the CAD.

Method I use to trade this:
Stavro D’Amore Trading Method

Please see my views on the EURO

I will look for a 30% retracement in the original spike before entering a trade; I will sell half my position as soon as I hit the original high point of the first initial spike and place a SL at entry price. My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame using Fibonacci retracement

I do recommend spike trading as an option if you are using a reliable broker and an Auto clicker.

Historical Chart and Data for CA Core CPI m/m

All the best

Stavro D’Amore