0700 CAD Employment Change (15K expected, 30.4k prior, -5.3k to +35.0k range)
-Affliated Reports
CAD Unemployment Rate (7.6% expected, 7.6% prior, 7.5% to 7.7% range)
This is a great news release to trade, although the past 3 months there really has not been a big enough deviation on the
Employment Change number for a trade. Last month the lower Unemployment Rate number was enough to kick the USDCAD into gear
and head lower, as the CAD has been trending towards strength. We usually use triggers of +/-15 on this one, and the last
tradable deviation was in October where a -16.6 deviation caused about a 40-45 pip spike, however the Rate Number was also
lower, however this is Good for the CAD and soon the USDCAD reversed the spike up caused by the Bad Change deviation. So it
appears that there is enough potential for this to move based on this deviation, but if there is any conflict on the Rate then
get out fast...as the October release shows a +/-15 or more deviation should move the pair enough in your favour to get out
with loss if there is a conflict. Slightly wider triggers of +/-20 would put the figure outside the range of all analyst's
estimates, although actually there is only 1 analyst with a -5.3k prediction, all the other estimates exist in the 10k to 35k range.
If it comes out at 30K or higher, USD/CAD should fall 40+ pips.
If it comes out at 0K or lower, USD/CAD should rally 40+ pips.
If it comes out at 35K or higher, 6C should rally 40-50 ticks.
If it comes out at -5K or lower, 6C should fall 40-50 ticks.
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0830 US NonFarm Payrolls (146K expected, 103 prior, -5k to 230k range)
Affliated Late
US Unemployment Rate (9.5% expected, 9.4% prior, 9.2% to 9.6%)
US NonFarm Payrolls Revision (103k last month)
US Private Payrolls (145k expected, 113k prior, 72k to 204k)
US Manufacturing Payrolls (10k expected, 10k prior, -4k to 20k)
The most popular news release of the month comes out with many bits of data that can all affect the market. The main Non Farm Payrolls is the most important and the median estimate is quite close to last months number despite the fact that last month there was a negative deviation. After this watch the Unemployment Rate, which is expected at 9.5%, any hint of this getting back up closer to the key 10% level will have a negative impact on the USD. The Private Payrolls number was added a few months ago and is an important indicator of jobs growth in the private sector, this evolved out of the extra hiring of census workers some time ago which was obscuring the picture on employment. USDJPY tends to respond to this better, if everything deviates correctly there there will be a spike, pullback and continuation. The EURUSD sometimes has a muted response to the initial deviation on the data but then moves afterwards, often there can up whipsaws on this, so don't get too attached to a position.
If Employment comes out at 196K or higher, and unemployment Rate is flat or lower, USDJPY should rally 50+ pips
If Employment comes out at 96K or lower, and unemployment Rate is flat or higher, USDJPY should sell off 50+ pips
If Unemployment Rate comes out at 9.7% or higher, and NFP is flat, USDJPY should extend lower or potentially reverse lower.
If Unemployment Rate comes out at 9.3% or lower, and NFP is flat, USDJPY should extend higher or poetentially reverse higher.
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1000 CAD Ivey PMI (53.15 expected, 50 prior, 51.5 to 55.0 range)
This one is a pretty solid trade that sometimes has a decent spike with additional follow-through, and other times has a modest spike with plenty of slow follow-through. In January a +/-4 deviation caused about 20 pips of movement, and after a pullback some 45 minutes later, the USDCAD did extend for a further 30 pips.In December there was not a big deviation on this release, however the past 3 releases of this indicator have been quite large, and have had good follow thru. For smaller deviations this release can cause a quick spike but then reverse. If you can control your broker's slippage and have target limit orders set within 15-20 pips then a deviation of +/5 can be used, for catching follow thru on an afterspike a deviation of +/- 8 is best.
Spike strategy: Use somewhat tight slippage control to ensure entry within 10 pips of pre-release. Typically the spike is 20 pips with an extension to new extremes (30-40 pips) over 5-10 minutes. If deviation is nominal lock in profit quickly and if there is no continuation be ready to exit the remainder.
Afterspike: Oftentimes USD/CAD will go into a nice slow-motion trend that will push prices even further over 2 hours after release. Try to get in on a 50%-61% of pre-release in the first few minutes and look for a retest of the highs to take half profits and let the run for gravy.
If it comes out at 62.0 or higher, USD/CAD should sell off 30-40 pips
If it comes out at 46.0 or lower, USD/CAD should rally 30-40 pips
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