Forex Trading Strategy For Canada Employment Change 07/09/10
We’ll be getting the Canadian Employment Change release number tomorrow, here is the forecast:
7:00am (NY TIme) CA Employment Change Forecast 18K Previous 24.7K
(Unemployment Rate 8.1%)
ACTION: BUY -15K SELL 48K USD/CAD
Canadian Employment Change report will be release at 7:00am sharp today, and it is the only tradable high impact news releases for this Friday. What I am looking for is a minimum deviation of 30K, or the difference between the Forecast number (18K) versus the actual release number; therefore if we get a positive 48K of release, we should see demand for the CAD rise, therefore we should SELL USD/CAD; however, if we get a negative number, such as -15K or worse, we should see some weakness in the CAD, and that will be my cue to BUY USD/CAD pair.
I’ll also pay close attention to the unemployment rate, which stands at 8.1%, same forecast as last month’s release. 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 take the trade.
With recent risk appetite sentiment and the rise of demand on commodity currencies, USD has been under pressure while CAD, AUD, and NZD has been benefitting from this sentiment. If we get a strong release, which contrasts the weak NFP release just last week, CAD would probably pick up momentum and move below the 1.0300 level before the end of trading on Friday…
DEFINITION
“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.”
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