News Trader - Canadian Retail Sales

What is Expected
Time of release: 08:30 EST, 12:30 GMT 4/20/2007
Primary Pair Impact : USD/CAD
Expected: -0.2%
Previous: -0.2%

Effect of Canadian Retail Sales on the USD/CAD For Past 3 Periods


Data Released



Pips Change

(1 Hours post event )

Pips Change

(End of Day post event)

Jan 2007
03/21/2007 12:30 GMT





           Dec 2006
        02/21/2007  12:30        GMT





           Nov 2006
        01/23/2007  12:30        GMT





How To Trade This?
Price action has shown itself as fairly consistent through the past three releases of Canadian Retail Sales. Markets certainly react to surprises in either direction, with varying degrees of post-news extension allowing for commensurate profit potential on any trades. Perhaps of greater interest, the Canadian Retail Sales report tends to follow the performance of the preceding day’s Wholesale Sales print with fairly good accuracy. In other words, surprises in Wholesale Sales data predict the same direction of surprises in the more closely-followed Retail report.
Thursday’s impressive Wholesale data leaves risks to the upside for the coming number?providing solid profit potential on Canadian dollar longs (USDCAD shorts). The more aggressive trader could potentially sell the USDCAD in anticipation of the strong data. This is an admittedly high-risk endeavor, but previous months suggest that this could nonetheless prove to be a profitable strategy. A more tempered approach could wait for the Retail Sales print and place an effective post-news trade. An initial USDCAD drop eyes nearest support at recent spike-lows of 1.1250, with a break to likely test six-month lows at 1.1227.
Given low consensus estimates of a 0.2 percent drop, the Retail Sales report is not entirely likely to provide a profitable CAD short (USDCAD long). That being said, strong downward momentum in the USDCAD does indeed leave it susceptible to shorter-term retracements, with a disappointing Retail Sales print to give ample reason for such a move. Any USDCAD bounce eyes a fairly significant falling trendline at 1.1300, with a break to challenge significant highs at the 1.1391 mark.