Trading the News: Canadian Net Change in Employment
What is Expected
Time of release: 05/11/2007 11:00 GMT, 7:00 EST
Primary Pair Impact : USD/CAD
Expected: 20.0K
Previous: 54.9K
Effect of Canadian Net Change in Employment on the USD/CAD For Past 3 Periods
Month
Data Released
Estimate
Actual
Pips Change
(1 Hour post event )
Pips Change
(End of Day post event)
March
04/05/2007 11:00 GMT
11.0K
54.9K
-68
-74
February
03/09//2007 11:00 GMT
5.0K
14.2K
-15
-54
January
02/09/2007 11:00 GMT
13.5K
88.9K
-66
-116
How To Trade This?
The Canadian Employment Change report has provided solid profit potential through the past three releases, with the Canadian dollar rallying on each official announcement. Momentum clearly remains to the topside for the overall domestic labor market, as the figures have beat consensus forecasts in each of the past 7 mont hs of reports. One has to wonder how long this is likely to last, but we will nonetheless maintain a bullish bias ahead of the release.
Given expectations of a strong employment gain, the USDCAD may have difficulty moving lower if numbers do not surprise strongly to the topside. Likewise significant, overall Canadian dollar momentum has slowed on the USDCAD?s bounce off of 1.1000?leaving risks of a furth er short-term bounce. If Employment Change surprises to the topside, however, we will nonetheless go short the USDCAD on a post-news trade. Wait for a 5-minute confirmation of a CAD-bullish price move to sell USDCAD, setting stops above immediate swing-highs. Profit potential may be limited if the pair is unable to clear significant support, requiring a watchful eye to determine optimal take-profit points.
High consensus forecasts arguably leave risks to the downside ahead of the print, with a negative surprise to allow for a furth er USDCAD bounce. If numbers surprise to the downside, the news trader should be prepared to go long the US DCAD on confirmation of a CAD-bearish move. The pair is currently testing topside resistance of 1.1075, with a break above to challenge immediate spike-highs at 1.1100.
