FX Trading Signals for Jan 23
1. Tuesday, January 23rd, 2007 (7:00 am New York Time) CANADA
We have Canadian CPI coming out for the month of December. We have both the headline numbers and the core numbers coming out. My focus will be on core month over month number. Most expectations is that the number will come out at either 0% or 0.1%. Prior number was at 0.3%. If the number comes out at -0.1% or more negative, it would signify deflation in the Canadian economy, and therefore may mean a rate cut rather sooner than later, therefore it would be negative for the Canadian dollar short term, and I may possibly go long on USD/CAD. If the number comes out at 0.2% or higher, that would mean that inflation is still strong, especially a 0.2% decrease right after 0.3% increase. That would mean that Canadian inflation is high, therefore expansion is probably high, and they may keep the rates at where they are or may consider doing another rate hike, so that would be good for the Canadian dollar, and I may possibly go short on USD/CAD. I will also look for conflicts on the headline numbers or the core annual number, and if I see conflicts, I may exit rather sooner than later. If my triggers are hit, I would expect a move on USD/CAD of at least 30 pips to 50 pips or more. The size of the move will depend on how big the deviation from consensus is, whether there are any conflicts from other numbers, and the price levels before the report.
2. Tuesday, January 23rd, 2007 (8:30 am New York Time) CANADA
Then we have Retail Sales coming out of Canada for the month of November. My focus will be on the month over month Retail Sales less autos. We've seen two big drops in a row on this number in September and October. We saw a decline in September by -0.9%, and then right after that we saw a decline of -0.7%. After such huge decline, a rebound is usually normal, therefore most economists expect the number to come out at around 0.4%. If the number comes out at 0.7% or higher, I may possibly go short on USD/CAD, since it would be good for the Canadian dollar short term. If the number comes out at 0.1% or lower, I may possibly go long on USD/CAD, since it would be bad for the Canadian dollar. Will definitely watch out for any revisions, and the headline retail sales number, which is expected at 0.8%. If there are any conflicts, I will definitely be looking to exit rather sooner than later. The move on this one should be at least 30 pips if my triggers are hit...however it may take up to 30 minutes or a bit longer for the move to fully unfold.
3. Tuesday, January 23rd, 2007 (7:30 pm New York Time) AUSTRALIA
Then we have quarterly CPI coming out of Australia. The expectations for the 4th quarater are very low...only at 0.2%. If the CPI comes out at 0.4% or higher, I may possibly go long on AUD/USD, since it would be good for the Australian dollar. If the CPI comes out at 0.0% or negative, I may possibly go short on AUD/USD, since it would be bad for the Australian dollar. If my triggers are hit, I am expecting a move of at least 30 pips or more on this report.
We have Canadian CPI coming out for the month of December. We have both the headline numbers and the core numbers coming out. My focus will be on core month over month number. Most expectations is that the number will come out at either 0% or 0.1%. Prior number was at 0.3%. If the number comes out at -0.1% or more negative, it would signify deflation in the Canadian economy, and therefore may mean a rate cut rather sooner than later, therefore it would be negative for the Canadian dollar short term, and I may possibly go long on USD/CAD. If the number comes out at 0.2% or higher, that would mean that inflation is still strong, especially a 0.2% decrease right after 0.3% increase. That would mean that Canadian inflation is high, therefore expansion is probably high, and they may keep the rates at where they are or may consider doing another rate hike, so that would be good for the Canadian dollar, and I may possibly go short on USD/CAD. I will also look for conflicts on the headline numbers or the core annual number, and if I see conflicts, I may exit rather sooner than later. If my triggers are hit, I would expect a move on USD/CAD of at least 30 pips to 50 pips or more. The size of the move will depend on how big the deviation from consensus is, whether there are any conflicts from other numbers, and the price levels before the report.
2. Tuesday, January 23rd, 2007 (8:30 am New York Time) CANADA
Then we have Retail Sales coming out of Canada for the month of November. My focus will be on the month over month Retail Sales less autos. We've seen two big drops in a row on this number in September and October. We saw a decline in September by -0.9%, and then right after that we saw a decline of -0.7%. After such huge decline, a rebound is usually normal, therefore most economists expect the number to come out at around 0.4%. If the number comes out at 0.7% or higher, I may possibly go short on USD/CAD, since it would be good for the Canadian dollar short term. If the number comes out at 0.1% or lower, I may possibly go long on USD/CAD, since it would be bad for the Canadian dollar. Will definitely watch out for any revisions, and the headline retail sales number, which is expected at 0.8%. If there are any conflicts, I will definitely be looking to exit rather sooner than later. The move on this one should be at least 30 pips if my triggers are hit...however it may take up to 30 minutes or a bit longer for the move to fully unfold.
3. Tuesday, January 23rd, 2007 (7:30 pm New York Time) AUSTRALIA
Then we have quarterly CPI coming out of Australia. The expectations for the 4th quarater are very low...only at 0.2%. If the CPI comes out at 0.4% or higher, I may possibly go long on AUD/USD, since it would be good for the Australian dollar. If the CPI comes out at 0.0% or negative, I may possibly go short on AUD/USD, since it would be bad for the Australian dollar. If my triggers are hit, I am expecting a move of at least 30 pips or more on this report.
posted by Naveen Pantera at 7:56 AM
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