CA Employment Change | June 8, 2012 | News Plan
We´ll be getting the Canadian Employment Change release number tomorrow, here is the forecast:
8:30am (NY Time) CAD Employment Change Forecast 7.5K Previous 58.2k
Unemployment Rate 7.3%
DEVIATION: 25K (BUY CAD @ 32K / SELL CAD @ -20K)The Trade Plan
The Canadian Employment Change report will be released at 8:30am sharp today (changed from the usual 7:00am). What I am looking for is a minimum deviation of around 25K, or the difference between the Forecast number (7.5K) versus the actual release number; if we get a positive 32K of release, we should see demand for the CAD rise, therefore we should BUY CAD against weaker currencies at the time; however, if we get a negative deviation, such as -20K or worse, we should see some weakness in the CAD, and that will be my cue to SELL CAD against stronger currencies at the time.
I´ll also pay close attention to the unemployment rate, which is expected to stay at 7.3%. As long as this number does not conflict with the Employment Changes, we should follow the direction of the news release. If we get a conflict, such as better Employment Changes but higher Unemployment Rate, then we´ll need to look at the context of the market before taking the trade.
I´ll be looking to trade this release using my after-news Retracement Method. To find out more about my trading system, read:
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.
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
“Measures the change in number of employed people during the previous month. A rising trend has a positive effect on the nation´s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.”
CA IVEY HIT 60.5 V 51 very positive indeed
However, cadjpy fell 60pp immeiately before making a small gain of 40pp; and thereafter went further south. How to explain this phenomena?
I think it is because of Bernanke’s testimony scheduled at the same time where he talked about global economic strains… Market was a bit disappointed over the lack of announcements on QE3, here is a link to better understand what happened.