We were watching two news releases this morning, neither of
which hit our triggers. First the US PC Core report came out,
and my recommendation was only to trade this if we had Personal
Spending and PC Core in agreement, and both deviating by 0.2 or
more. This did not occur, so this was a no trade. We were
expecting some USD strength as a rebound from yesterday’s sell
off after the FOMC rate decision. We were expecting the .9420
level to hold up on the USDCAD, which it did. We have seen a
nice 100 pip rebound from that level, and are currently still
holding long positions from last month. To see a video of
today’s trade, click on the link below:
We are also looking for the EURUSD to begin its move down. At
this point we expect to see USD strength overall across a
majority of the pairs. I believe that tomorrow’s releases are
going to be the deciding factor. We really need a panic in the
market, so to speak, to scare the bears who are pushing this
dollar down further and further and get them to pull their
positions.
It is very possible we will see this happen tomorrow as we have
CAD Labor Change figures coming out, followed by the US Non
Farm Payrolls. Both are very large releases that typically
move the market a minimum of 50 pips. We sometimes see in
excess of 100 to 200 pips under extreme conditions. So I am
definitely looking forward to tomorrow. I am more comfortable
with the CAD Labor Change figures than with the US Non-Farm
Payrolls, simply because there are fewer variables involved.
We rarely have any kind of revisions, and it’s generally a
pretty cut-and-dry trade.
TWO LIVE TRADE CALLS FOR TOMORROW
For the CAD Labor Change report at 7:00 am EDT, we will look
for around 15,000 in deviation from the expected value of
12,000 jobs. If the number comes out higher than expected, we
will look to sell the USDCAD or EURCAD. If the number comes out
lower than expected we’ll look to buy the USDCAD or EURCAD.
Ideally, I would like to see this come out lower than
expected. I would like it to be weak for the CAD.
This release met our safe trigger last month and we had traders
report profits of 50-75 pips. To see a video of last month’s
trade, you may click on the link below:
For the US Non-Farm Payrolls at 8:30 am EDT, we typically look
for around 50,000 in deviation for our safe trigger. If we get
this type of deviation from the expected number of 85,00 jobs,
my suggestion will be to trade the GBPUSD or the EURUSD as each
should move anywhere from 50 to 100 points, depending on the
revisions. If we see a revision and it is in conflict with our
trade and exceeds 17,000 from last month, then we may pull our
positions. However, as long as it is below the 17,000 mark I am
fairly confident 50,000 will carry the market at least 60, and
maybe even 80-100 pips.
This release last met our safe trigger in September, and we had
many traders report profits of 30-60 pips. To see a video of
September’s trade, click on the link below:
If this release is in agreement with the Canadian employment,
for example if we have a weak CAD release, and we have strong
USD release, the USDCAD will be a really good currency to
trade. So if you can get in on the USDCAD and get a good
position built prior to NFP, then it might be wise to hold that
position because we could very well be in for a significant
move. At this point the USDCAD is at 50 year lows and we
anticipate the reversal occurring anytime now.
