Forex Trading Signals by Magister Pips, 2012/02/03
0700 CAD Employment Change (+22K expected, +17.5k prior, +5k to +45k range)
Top Analyst Estimates: 1st 20k 2nd 25k 3rd 25k
Range Spread: 40k vs. 53k jan11 vs. 39.5k dec11 vs 45k nov11
-Affliated Reports
CAD Unemployment Rate (7.5% expected, 7.5% prior, 7.4% to 7.5% range)
CAD Full Time Employment Change (-25.5k prior, +34.6k dec11, -71.7k nov11)
CAD Part Time Employment Change (+43.1k prior, -53.3k dec11, +17.7k nov11)
CAD Participation Rates (66.6 expected, 66.6 prior, 66.6 unanimous)
Just a small -2.5k deviation lower on Net Change, came with a drop in Fulltime from +34.6k to -25.5k,
but an increase in Parttime from -53.3k to +43.1k. The USDCAD did spike up abotu 20 pips in the 1st
minute and continued for 6 more minute for another 10 pips, then went sideways until NFP where it
whipsawed around but did eventually shoot up another 25 pips, pulled back and then rallied again,
ending the session about 110 pips above there it was before the release. It was a risk off day and
volumes were low as xmas holiday had just finished. Normally this is not a good enough deviation to
be interested in. In December a -38.6k deviation was more significant and USDCAD spiked 55-55 pips.
However Full-time employment grew from -71.7 on novembers release to +34.6 in december (all data
represent the month prior to the release. Meanwhile Part-time employment fell from +17.7 in november
to -53.3, thus the -38.6k deviation on the Net figure was mostly due to a loss of Part-time jobs,
while Full-time jobs actually grew. 6 minutes after the release the USDCAD reversed about half the
move but with NFP from the USA release just 90 minutes after this took the focus. Unlike Australian
Employment there are still not estimates given for Full and Part time employment change, so after the
initial release of Net Change you need to quickly check the Full and Part time figures. If the Full
times figure agrees with the Net Change it is best, for instance if Net Change comes out at +50k for
a +28k deviation and Fulltime Change goes from -25.5k to a higher figure like +25k then this agrees
and the spike should continue. If this is not the case then you will want to take profit and watch
out for some retracement. The initial reaction follows the Net Change but if there is a big conflict
with Fulltime Change it could reverse quickly. Of course also check the Unemployment Rate figure if
there are any conflicts there - a lower figure here is good, while a lower figure on Net Change is
bad, so the deviations are inverted. Also there is NFP only 90 minutes after this figure so the USDCAD
is unlikely to extend very much. If the NFP agrees with the Canadian Employment figures then USDCAD
could be the best mover of the day. For instance if Canadian Employment is low and then NFP is low
USDCAD will spike initially on the bad data, but continue up on a 'risk-off' theme which will make the
market buy US Treasuries and thus prop up the US Dollar.
If it comes out at 42K or higher, and f/t employment is higher than last month,
USD/CAD should fall 40+ pips.
If it comes out at 2K or lower, and f/t employment is lower than last month,
USD/CAD should rally 40+ pips.
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