Written by dustin pass
Thursday, October 21st, 2010
TRADE CALL RECAP
For our last live trade call, we were watching the UK Retail Sales report this morning. For this release, we were looking to sell the GBPUSD if the number came out at least 0.4% worse than expected. The actual number came out only 0.2% worse than expected, so it did not meet our safe trigger.
OUR NEXT LIVE ON THE NEWS TRADE CALLS
Tomorrow we will have two opportunities for a trade when the Canadian CPI and Canadian Retail Sales reports will be released. The first opportunity comes when the Canadian CPI report is released at 7:00 am EDT (11:00 am GMT). There are several components to this release, and we will be focusing on the CAD CPI Excluding Core 8 (YoY) figure. The expectation for this report is 1.3%. We will be looking for a deviation of at least 0.3% to trigger a safe trade. A lower than expected number will trigger a buy on the USDCAD or EURCAD.
We will probably prefer to see a buy on the USDCAD and EURCAD, but we could see a 20-35 pip spike either way if it meets our trigger. We will use caution on this particular release as it has gone the wrong direction a few times recently. Because of this, we will most likely raise our safe trigger to 0.3%.
This report last met our raised safe trigger in April, and the USDCAD and EURCAD moved over 40 pips each. We had traders report profits of up to 30 pips on this particular trade. The chart below shows how the USDCAD reacted at the time of April’s release:
The video of April’s trade is below:
httpv://www.youtube.com/watch?v=J_CDyvMsBvY
The second opportunity comes when the Canadian Retail Sales report is released at 8:30 am EDT (12:30 pm GMT). Our focus will be on the Retail Sales less Autos number and the currency pair you should trade is the EURCAD as it typically moves better than the USDCAD. The expectation for this release is 0.5%.
A higher than expected number will be good for the CAD and signal a sell on the USDCAD and EURCAD, and a lower than expected number will be bad for the CAD and signal a buy on the USDCAD and EURCAD. For this release, we will raise our safe trigger so we will be looking for a deviation of at least 0.6% to enter a trade.
We will most likely prefer a buy trigger on this report as the EURCAD is currently in an uptrend. We can anticipate a 25-40 pip spike either way, but it may just be a temporary move if we get a sell trigger. We will use caution on this trade as it hasn’t moved as much recently, and that is why we will raise our safe trigger to 0.6% tomorrow.
This report has met our raised safe trigger eight times in the last year, and the EURCAD moved 25 to 50 pips each time. This report last met our safe trigger last month and we had traders report profits of up to 50 pips on the trade. Below is a chart showing the movement of the EURCAD at the time of last month’s release:
The video of last month’s trade is below:
httpv://www.youtube.com/watch?v=9j4UPMXiBPA
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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