Forex News Trading CA Employment Change

We´ll be getting the Canadian Employment Change release number tomorrow, here is the forecast:

7:00am (NY Time) CAD Employment Change Forecast 18K Previous -18.6K
Unemployment Rate 7.4%
ACTION: EUR/CAD SELL 45K / BUY USD/CAD -10K

The Trade Plan
The Canadian Employment Change report will be released at 7:00am sharp today. What I am looking for is a minimum deviation of around 25K, or the difference between the Forecast number (18K) versus the actual release number; if we get a positive 45K of release, we should see demand for the CAD rise, therefore we should SELL USD/CAD; however, if we get a negative deviation, such as -10K or worse, we should see some weakness in the CAD, and that will be my cue to BUY USD/CAD pair.

I´ll also pay close attention to the unemployment rate, which is expected remain unchanged at 7.3%. As long as this number does not conflict with the Employment Changes, we should follow the direction of the news release. If we get a conflict, such as better Employment Changes but higher Unemployment Rate, then we´ll need to look at the context of the market before taking the trade.

The Market
Today’s IVEY PMI report came at a surprising 63.5 versus 57.5, with the Employment Index at a surprising 60.00 versus November’s 49.4 and October’s 51.4, and likely to give us a stronger CAD release tomorrow… With that being said, I believe with the current market dumping European currencies, CAD may very well remain resilient tomorrow.

Additional Thoughts
USD/CAD is a slow moving currency pair, it will move on a strong deviation, but retracement is usually non-existent or very small… Therefore, if we get a strong release, especially when it is going with the pre-market trend, a sooner than later entry should add more pips to your account. Expect to see a spike down -> stall -> another spike down…

Pre-news Considerations
I’d considering selling EUR/CAD on rallies with expectation of a weaker EURO versus stronger CAD.  1.3100 would probably be a decent entry level if the market rallies there.