On Friday 04-17-09 at 7:00 AM ET, the CAD Bank Canada Consumer Price Index Core report will be released for the month of March.
The previous CAD Bank Canada Consumer Price Index Core report came out on Thursday 03-19-09 at 10:00 AM ET.
The CAD Bank Canada Consumer Price Index Core report released in March, for the month of February, was set up as follows:
Previous Report: -0.4% – same as the February report – no revision.
Economists Forecast: 0.2% – an improvement for the US economy.
The actual report: 0.5% – greater than forecast by 0.2% and good for the Canadian economy, and enough for a trade.
I monitored 4 currency pairs during the March CAD Bank Canada Consumer Price Index report and here is what happened:
CAD/JPY - moved down about 55 PIPS in 31 minutes – wrong direction
moved up about 60 PIPS in 19 minutes – right direction
moved up about 80 PIPS 26 minutes – wrong direction
EUR/CAD – moved down about 30 PIPS 1st minute – right direction
moved up about 65 PIPS in 34 minutes – wrong direction
GBP/CAD – moved down about 25 PIPS 1st minute – right direction
moved up about 108 PIPS in 42 minutes – wrong direction
USD/CAD – moved down about 28 PIPS 1st minute – right direction
moved up about 40 PIPS in 19 minutes – wrong direction
moved down about 170 PIPS in 40 minutes – right direction
The CAD Bank Canada Consumer Price Index for this month’s release ( a report on March CAD Bank Canada Consumer Price Index ) has a “forecast” of 0.2%, a small increase in the health of the economy for that month.
If the “actual” CAD Bank Canada Consumer Price Index report comes out less or more than the “forecast” by a large amount, say 0.2% or more, this would be a huge surprise for FOREX traders and the market may move considerably in the following minutes of the report.
So, let’s set this up:
The March previous= -0.5%
The economists forecast= -0.2%
If the “actual” report comes out 0.4% or more, this will be good for the CAD, and a big surprise for traders. Any currency pair which includes the CAD may move in favor of the CAD.
However, if the “actual” report comes out at 0.0% or less, this would be bad for the CAD and again, a big surprise for traders. Any currency pair which includes the CAD may move against of the CAD.
The probabilities set forth above are assuming no unpredictable events are taking place at the same time.
Speeches on the economy by government officials, or a situation somewhere in the world that could have an impact on the U.S. economy – could adversely affect the market.
Sometime after the end of the CAD Bank Canada Consumer Price Index report I will post the results. So, check back!
Wednesday 04-17-09:
Here are the results of CAD Bank Canada Consumer Price Index report:
Previous Report: 0.5% – no revision.
Economists Forecast: 0.2% – not an improvement for the Canadian economy.
The actual report: 0.3% – greater than forecast by 0.1% and a small improvement for the Canadian economy, but not much, and not enough for a trade.
The “actual” report came out at 0.3%, not good for the CAD and the Canadian economy, but better than expected. Not enough for a trade, however the market traders had it figured in and below is what happened.
Here is how it affected the 4 currency pairs I follow:
CAD/JPY - moved down/up 1st 2 minutes
moved up about 10 PIPS in 6 minutes – right direction
moved down about 25 PIPS 8 minutes – wrong direction
EUR/CAD – moved down/up 1st 2 minutes
moved down about 20 PIPS in 4 minutes – right direction
moved up about 32 PIPS 41 minutes – wrong direction
GBP/CAD – moved down/up 1st 2 minutes
moved down about 18 PIPS in 11 minutes – right direction
moved up about 60 PIPS 37 minutes – wrong direction
USD/CAD – moved up/down 1st 2 minutes
moved down about 9 PIPS in 10 minutes – right direction
moved up about 50 PIPS in 37 minutes – wrong direction
I followed an additional 2 currency pairs prior to the report release and traded on one of those for a “scalp” win. I have been able to do more trades this week prior to the economic reports.
“Scalping” currency pairs just prior to the economic reports is something I started in the last 2 – 3 weeks and it seems to be paying off. Even better than trading the aftermath of reports.
I would to hear from anyone who has any experience with “scalping” methods around the FOREX news release.
