Canadian Retail Sales After-spike Scalping with the FX Futures Contract

This past Friday January 21st 2011, the Retail Sales figures out of Canada were release, these were generally expected to be higher after the Bank of Canada said in there last that household spending had unexpectedly increase, this was opposed to their statement in October which was that it was likely to reduce. Here are the figures:

CANADA NOV RETAIL SALES M/M: 1.3% V 0.5%E; RETAIL SALES LESS AUTOS M/M: 1.0% V 0.5%E
- Prior Retail Sales MoM revised higher from 0.8% to 1.0%

A good deviation on the headline number, but really was looking for more of a deviation on the Core figure on this one. Spike traders were focusing on the Core number primarily for a spike trade, however both did numbers did come out higher than expected, so it was a good reason to buy Canadian Dollars, and there was actually alot more pips to be made on the follow thru.

The attached chart show the 2 trades taken, remember the Canadian Dollar Futures moves opposite to the direction of the USDCAD forex pair, so basically you are trading CADUSD. This chart is a good example of what can happen with economic news trading, sometimes the 1st pullback doesn't give you the continuation, so either you are patient or take some profit when you see the trade rolling back over. You can always reenter a trade so I perfer to do this rather than wait for it go back in the profitable direction.

Canadian Employment - just missed deviation and mixed

Canadian Employment data just hit the wires about 10 minutes ago. This report consists of 2 numbers: the Employment Change number and the Unemployment Rate. A higher Employment change number is good for the Canadian Dollar or loonie and will tend to send the USDCAD down, while a higher Unemployment Rate is bad and will send the USDCAD up. This time the Employment Change number was lower with a -12 dev and so was the Unemployment rate at -0.1, so in this case the data conflicted, with the change figure bad for the loonie and bullish for USDCAD and the rate number good for the CAD and bearish for USDCAD. Initially the price of USDCAD did move higher, following the lower employment change, but it didn't continue or even maintain the new high achieved. Price came right back down quite quickly and then whipsawed around. Also the breakdown of part-time versus full-time jobs is now being reported. Here are the numbers:

*(CA) CANADA OCT NET CHANGE IN EMPLOYMENT: 3.0K V 15.0KE; UNEMPLOYMENT RATE: 7.9% V 8.0%E
- No revisions

Breakdown of Jobs report:
- Full-time jobs: 47K v 37.1K prior
- Part-time jobs: -44.2K v -43.7K prior

The USDCAD did move up heading into the report, but this was unlikely to have been a move induced by a rumor or leak of the number, rather just that in general the USD was retracing some of the losses it took in the aftermath of the FOMC announcement on wednesday. The EURUSD took the biggest hit as the market focused on widening peripheral bond spreads, which had been an issue all week, but now that the US elections and the FOMC with QE2 is out of the way, the market could focus on it.

Included are 2 charts, first chart is a 1 minute chart of the USDCAD, which shows some of the run-up of the pair into the report. The second chart is the December Canadian Dollar Futures Contract which goes by the name of 6C on Ninjatrader (I have found different platforms have different symbols). This chart shows the 1 second price action. Remember the 6C trades in the opposite direction to the USDCAD...ie stronger Canadian Dollar means up.