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Markets Anticipate Canada Core Retail Sales Release

ByHenry Liu
Published 05/21/2012, 04:15 AM
Updated 07/09/2023, 06:31 AM
USD/CAD
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CORB
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Retail Sales is usually a very tradable release as traders draw direct correlation between retail activities with economic health. Here's Forecast:

8:30am Core Retail Sales Forecast 0.6% Previous 0.5%
DEVIATION: 0.5% (BUY CAD 1.0% / SELL CAD 0.0%)

The Trade Plan

I'm going to be looking for a deviation around 0.4 ~ 0.6% for this news. Since the forecast is at 0.6%, a reading of 0.0% would be negative for the CAD and we'll be looking to SELL CAD; however, if the opposite is true, or a 1.0% (or better) of actual release, I'll be looking to BUY CAD.

I’d recommend to use the Recommended Pairs from above, as they are based on CSM and should give you an edge and trade the pairs in the direction of the intra-day trend. Or of course, you can trade the default pair: USD/CAD.

Let's trade this release using my after-news retracement method. The idea is to wait for the release, then for the market to spike first, and then wait for a decent retracement before getting in.

Definition
Our focus is on the Core Retail Sales release and not the headline Retail Sales release; Retail Sales releases from Canada is a month on month release, and basically it's a measurement of the activities at the retail level of Canada, and the Core release is the same Retail Sales but excluding most volatile components, Automotive Components, which makes up about 25% and it varies seasonly. A better release generally means more consumer spending, which leads to better economy, thus better for its currency. And the CORE reading provides a far more accurate look of the actual economy.

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