TRADE CALL RECAP
For our last live trade call, we were watching the Canadian CPI report this morning. This release had not had much impact on the market recently, so we suggested raising our safe triggers. We were looking to sell the USDCAD or EURCAD if the number came out at least 0.3% better than expected. The actual number came out only 0.1% better than expected so it did not meet the raised safe trigger.
OUR NEXT LIVE ON THE NEWS TRADE CALLS
Tomorrow we will have three opportunities for a trade when the UK Retail Sales, US CPI and Canadian Retail Sales reports are released. Our first opportunity comes when the UK Retail Sales report is released at 4:30 am EST. For this release we will focus on the Retail Sales (MoM) figure, and the expected number for this report is -0.5%. We will be looking for a deviation of at least 0.4% on this report to trigger a safe trade. A higher than expected number will be good for the GBP and signal a long on the GBPUSD, and a lower than expected number will be bad for the GBP and signal a short on the GBPUSD.
I would prefer to see a sell trigger on this particular release as it could affect the GBP more if the number comes out worse than expected. However, we could still see a 20-40 pip move if the safe buy trigger is met. I will most likely close the entire trade with 20-40 pips if we get a buy trigger. If we get a sell trigger and get a move of 30-40 pips, I will most likely close a portion of the trade and then lock in and hold the other portion of the trade for an even larger potential move.
The UK Retail Sales met our safe trigger in nine months last year, and the GBPUSD moved between 25 and 80 pips each time, except for a couple of times in which there were extenuating circumstances. This release last met our safe triggers last month, and traders reported up to 65 pips of profit on the trade! The chart below shows how the GBPUSD reacted to last month’s release:
The video of last month’s trade can be seen below:
httpv://www.youtube.com/watch?v=n1HW0rC0Oug
Our next opportunities come when the US CPI and Canadian Retail Sales reports are both released at 8:30 am EST. The RSS will allow us to trade both of these releases over multiple currencies, but if you are only able to trade one of the reports I would recommend focusing on the US CPI as it has had a larger impact than the Canadian Retail Sales lately.
For the US CPI report, we will be focusing on the US CPI Excluding Food & Energy figure. The expectation for this report is 0.2%. We will be looking for a deviation of at least 0.1% on this report to trigger a safe trade.
We are going to focus on the EURJPY for this trade tomorrow as the GBPUSD has gone the wrong way lately. We will most likely prefer to see a buy trigger on this as a buy trigger should have a big impact on the stock market, but we could see a good spike of 20-25 pips either way. We will use some extra caution as there is some additional US data coming out at the same time as this release, so we may even raise the safe trigger to 0.2%.
This report last met our safe trigger in December, although there was some additional data that came out conflicting with the trade. We suggested closing at about breakeven and we had traders report small losses or even small gains up to 10 pips on the trade. The movement of the EURJPY around the time of December’s release is below:
The video of December’s trade is below:
httpv://www.youtube.com/watch?v=_KXN57ZSmaU
For the Canadian Retail Sales report, our focus will be on the Canadian Retail Sales Less Autos report, and the expected number for this report is 0.4%. A higher than expected number will be good for the CAD and signal a short on the USD/CAD and EURCAD, and a lower than expected number will be bad for the CAD and signal a long on the USDCAD and EURCAD. We will be looking for a deviation of 0.4% on this report to trigger a safe trade.
For this trade, we will focus on the EURCAD since it typically moves more than the USDCAD. We will probably prefer to see a sell signal on this release, but it should still be tradable either way. We will use caution on this release as we have had some quick spikes then reversals lately on this particular release.
This report met our safe trigger seven times last year and provided moves of 15 to 90 pips each time. It last met our safe trigger in November and provided traders with up to 20 pips of profit on the USDCAD and EURCAD, depending on their entries. The chart below shows the movement of the USDCAD at the time of November’s release.
The video of November’s trade is below:
httpv://www.youtube.com/watch?v=gVzBeagGBwg
This is our current outlook for these trades; however, it is subject to change as market conditions may change by tomorrow. Be sure to log in to the Live Trade Room 15 minutes prior to the releases to get my commentary on these potential trades.
Good Luck!!!!
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