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Canada jobs and US payrolls on the same morning

On certain Fridays, the Canadian employment report and the US nonfarm payrolls come out at the same time, 8:30am New York. USDCAD is caught in the middle.

The pair takes two shocks at once. A strong US number lifts the dollar, a strong Canadian number lifts the loonie, and the result depends on which one surprises more. The first reaction is often a spike in one direction, followed by a reversal as the second report is digested.

The spread on USDCAD widens heavily, and execution is poor. The pair also feeds into CAD crosses, so the effect spreads.

Many scalpers see the combination as a double opportunity. Often it's a double trap. With two numbers and several sub-components each, the market needs time to figure out the net effect, and the early prints are messy.

The calendar is straightforward: both releases are scheduled, and they coincide on a regular basis. A note in the calendar for those Fridays is enough.

One approach is waiting for the first five minutes to pass and then trading the direction that emerges, with wider stops.

In the first five minutes of a double-release Friday, what does the usual USDCAD path look like?

Canada's Labour Force Survey and the US employment report are often released on the same day, at 8:30am Eastern. When both come out together, USD/CAD can move sharply in either direction, depending on how the two reports compare. A strong US number with a weak Canadian number would push USD/CAD up, while the opposite would push it down. If both surprise in the same direction, the effects partly cancel out in USD/CAD but may show up more clearly in other pairs. That makes USD/CAD on these days one of the harder pairs to predict and trade.

I've traded a handful of these double-release Fridays, and the path in the first five minutes has been messy more often than not. In my notes, USDCAD jumped in one direction within the first ten to fifteen seconds in nearly every case, and then reversed at least half of that move in the next minute. On two occasions the first move was around 35 pips and the final close of the five minutes was nearly back where it started.

The first move seems to react to whichever headline hits the feed first, and the second one to the combined picture. So I have stopped trading the first two minutes entirely. I wait for a candle on the one-minute chart to close beyond the extreme of the first spike, and I only enter in that direction with a stop beyond the opposite end.

The spread on my account was between 8 and 15 pips for the first few seconds, which alone is a good reason to stay flat until it settles.