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Looking for a news release to trade this week? You might want to play the Canadian retail sales report due 12:30 pm GMT tomorrow so I came up with a quick trading guide for y’all:

For the month of July, market watchers are expecting to see 0.6% growth in both core and headline reports. If that’s the case, it would be a decent rebound from the 0.8% decline in core retail sales and the 0.6% drop in headline consumer spending for June.

Some are even projecting an upside surprise, as the July wholesale sales report released last week showed a stronger than expected increase of 1.5% versus the estimated 1.1% rise.

On the flip side though, there might be some downside risks as hiring was weaker in the same month. Lower government hiring for July was enough to push the jobless rate up from 7.1% to 7.2%, which hints at a possible slowdown in spending. At the same time, stronger price pressures from foreign retailers are making it difficult for local retail stores to sustain demand.

Fortunately for us, we can prepare for both scenarios just by looking at the last two releases:

July 23, 2013: Better-than-expected

USD/CAD 15-minute Chart

Headline retail sales printed a 1.9% growth against expectations of a 0.4% uptick while its core figure also surprised to the upside. As we can see, price had been stalling near an intraday resistance at that time. The technical level held as the pair went on to make new lows until the end of the day.

August 22, 2013: Worse-than-expected

USD/CAD 15-minute Chart

Based on the charts above, we can see that USD/CAD tends to have an inverse correlation with how well Canada’s retail sales numbers are. In other words, a positive number could push USD/CAD down while a weak report could boost the pair. If you’re looking to trade this report, intraday areas of interest could be used as good entry levels.

If you’re not into committing to a direction ahead of the report though, you can also wait for the release and then ride the intraday wave until the end of the day. Just make sure that you place appropriate stop losses!