How to trade Canada's Retail Sales with USD/CAD

Retail sales are critical to the Canadian economy and the publication always moves the loonie.
The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
The USDCAD moved, on average, 15 pips in the 15 minutes after the data release and 36 pips in the following 4 hours.

Yohay Elam FXStreet

Selling USD/CAD Scenario

Tradable Positive Trigger: +0.80 deviation (0.58%) [SELL Pair]
Key Support Level: 1.2960

This time, if it comes out at higher than expected with a relative deviation of 0.80 or higher(0.58 or higher in actual terms), the pair may go down reaching a range of 45 pips in the first 15 minutes and 85 pips in the following 4 hours.

1.3000 is a round number. Further down, support is found at the August low of 1.2960. 1.2860 was a low point back in June.

Buying USD/CAD Scenario

Tradable Negative Trigger: -0.85 deviation (-0.41%) [BUY Pair]
Key Resistance Level: 1.3175

If it comes out lower than expected at a relative deviation of -0.85 or less(-0.41 or lower in actual terms), the USDCAD may go up reaching a range of 46 pips in the first 15 minutes and 87 pips in the following 4 hours.

1.3100 is a round number and also provided support to the pair in late July. 1.1375 is the high point seen in August. 1.3225 capped the pair in early July.

USD/CAD Levels on the Chart

More data

Retail sales surprised to the upside on in May with a leap of 2%, a much-needed rise in the spring after a slow winter. The publication for June carries modest expectations for an increase of only 0.1%. The Bank of Canada is watching the event closely.

In the last five releases, the USDCAD moved, on average, 15 pips in the 15 minutes after the data release and 36 pips in the following 4 hours. The previous release had a positive surprise of 1.48 in terms of relative deviation and the USDCAD reached a 37 pip range in the first 15 minutes and a range of 55 pips 4 hours thereafter..

Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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