Trading The CA Core Retail Sales Release, March 18, 2016
CA Core Retail Sales figure could be the catalyst to push CAD to the next level, but since this release is scheduled with CPI, and considering recent rebound in crude prices, I would recommend to pay more attention to inflation reading than retail sales…
8:30am CA Core Retail Sales Forecast 0.6% Previous -1.6% DEVIATION: 0.5% (BUY CAD 1.1% / SELL CAD 0.1%)
The Trade PlanI’m going to be looking for a deviation around 0.5% for this news. Since the forecast is at 0.6%, a reading of 0.1% would be negative for the CAD and we’ll be looking to SELL CAD; however, if the opposite is true, or at least a 1.1% or better is released, I’ll be looking to BUY CAD.
Let’s trade this release using my after-news retracement method. The idea is to wait for the release, then for market to spike first, and then wait for a decent retracement before getting in.
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: USD/CAD.
Outlook ScoreOutlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
Definition Our focus is on the CA Core Retail Sales release and not the headline Retail Sales release; Retail Sales releases from Canada is a month on month release, and basically it´s a measurement of the activities at the retail level of Canada, and the Core release is the same Retail Sales but excluding most volatile components, Automotive Components, which makes up about 25% and it varies seasonly. A better release generally means more consumer spending, which leads to better economy, thus better for its currency. And the CORE reading provides a far more accurate look of the actual economy.