CA Core CPI is a high impact release for CAD and since the U.S. Federal Reserve has already started raising interest rates, if we start to see any stronger than expected release out of this event today, market will surely keep that in mind as high inflation is a strong reason for central banks to hike interest rate.
As of right now, even with the forecast of 0.4%, the year on year reading is only at 1.5%. With the year on year reading falling since January (2.1%), it is increasingly likely for the central bank to keep rates unchanged for longer, thus if we get a strong positive surprise today, market will surely move on the unexpected. Obviously for the BOC to even consider a rate hike, they will need to see at least a trend above the 2.0%, which as of right now a difficult task.
Here´s the forecast:
8:30am CA Core CPI m/m Forecast 0.4% Previous 0.3%
The Trade Plan
Keep in mind to look for an after-news retracement trade for this release. I´ll wait for the release, then the initial market move, and wait for a decent retracement before jumping in. For more information on my trading methods: http://www.currencynewstrading.com/how-to-get-started-with-news-trading/
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: USDCAD.
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.
CA Core CPI | June 23, 2017 | Forex News Trading Plan
June 18, 2017 by Leave a Comment