Canadian Employment ROCKS!!! again....

One of my favourite economic reports to trade, why? because it tends to give good price moves, usually a deviation for +/- 15 is good enough, but even less can work, such as the -8.1 deviation in April. Also with other reports you have y/y, m/m, core, headline, and revisions to prior months all coming out at the same time. This other bits of data can muddle things up. Canadian Employment Change does come out with the Unemployment Rate figure however, but this is just 1 other piece of data, and if the Change figure has a significant deviation the Rate figure will usually be in the same direction (higher unemployment rate is bad, lower Employment Change number is bad as well which would equal a move UP on the USDCAD, GBPCAD, EURCAD, and down on CADJPY).

Last month we did have a higher Unemployment Rate (Bad) and higher Employment Change (Good), the usdcad blipped down for a split second and then reversed above the pre-release price fast. Luckily the deviation on the Change figure, which is the one we get a trade signal from, was not significantly higher above the expected number to trigger a trade. This month was different, everything lined up for us, we had a lower Unemployment number (Good) and a higher Employment Change number (also good). Also this time the Change number was a full +73.2 higher then the 20k expected coming in at +93.2K with Unemployment Rate -0.2 lower at +7.9 below the +8.1 expected...AND did we get a move.

I traded GBPCAD on this and made about 70 pips, but I got out in the 1st minute. Many times with the news you get a huge spike in the 1st minute or 2, then some retracement. Today however there was hardly any, so it was difficult to do a Retracement-type Afterspike trade, which is one of the news trading strategies we use in the chatroom. GBPCAD continued to drift down over the next 2-3 hours like a tire loosing air, you just had to jump-on and ride the momentum.

Apparently this report has totally changed analyst's expectations for the next rate hike from the Bank of Canada, moving the expectation that they will hike sooner.

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