Strix Forex NEWS: CA CORE CPI

NEWS TRADING
Friday April 20, 2012

[8:30am NY Time]

CPI is also known a Inflation and our focus will be on the
Core Inflation figure, also known as CPI excluding Food and
Energy, or CPI ex Volatile Items...

Here´s the forecast:
8:30am CA Core CPI m/m
Forecast 0.3% Previous 0.4%
ACTION: USDCAD BUY 0.0% / SELL 0.5%

DEFINITION:
“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households (Wikipedia).” It is also known as the “True Cost of Living”.

The Trade Plan
The Core CPI report will be released today and our deviation for this release, based on a historical track record, around 0.3%. Therefore, look for tradable figures of 0.0% or worse to BUY USD/CAD, or a +0.5% or better to SELL USD/CAD.

The Market
With the hawkish tone out of BOC lately, it is possible that the central bank is evaluating its options for a sooner than later rate hike; therefore, on a stronger than expected core release, we should see speculation rise on BOC moving up its time table for rate tightening.

Additional Thoughts
USDCAD may stall until the equity market opens; therefore I´d recommend use patience when trading this pair during 8:30am hour. Also Core CPI rarely surprises much, so if we do not get our deviation, just stay out of the market until U.S. market opens.

BOOKS

(Getting Started in Currency Trading: Winning in Today's FOREX Market - Michael Duane Archer ) 0470602120