A slowdown in Canada Retail Sales may spur a larger advance in USD/CAD
as the Bank of Canada (BoC) adopts a more cautious outlook for the
region.
What’s Expected:
Why Is This Event Important:
Following the surprise rate cut at the January 21 meeting, a further
deterioration in the growth outlook may prompt BoC Governor Stephen
Poloz to relay a more dovish tone for monetary policy and show a greater
willingness to further reduce the benchmark interest rate in an effort
to generate a stronger recovery.
Nevertheless, easing inflation along with the ongoing improvement in the
labor market may boost household spending, and a better-than-expected
print may push USD/CAD back towards the monthly low (1.2350) as it
limit’s the BoC’s scope to implement offer lower borrowing-costs.
How To Trade This Event Risk
Bearish CAD Trade: Canada Retail Sales Slip 0.4% or Greater
- Need green, five-minute candle following a dismal sales report to consider long USD/CAD entry.
- If the market reaction favors a bearish Canadian dollar trade, establish long with two position.
- Set stop at the near-by swing low/reasonable distance from cost; use at least 1:1 risk-to-reward.
- Move stop to entry on remaining position once initial target is hit, set reasonable limit.
- Need red, five-minute candle following the release to look at a short USD/CAD trade.
- Carry out the same setup as the bearish loonie trade, just in the opposite direction.
USD/CAD Daily Chart
- Need a break of the near-term bearish momentum in RSI to favor a resumption of the long-term bullish trend.
- Interim Resistance: 1.2797 (February high) to 1.2800 (38.2% expansion)
- Interim Support: 1.2340 (38.2% retracement) to 1.2390 (161.8% expansion)
Period | Data Released | Survey | Actual | Pips Change (1 Hour post event ) | Pips Change (End of Day post event) |
---|---|---|---|---|---|
NOV 2014 |
01/23/2015 13:30 GMT | -0.2% | 0.4% | -22 | -17 |