8:30m (NY Time) US NFP (Nonfarm Payroll) Changes Forecast -3K Previous -11K (Unemployment Rate 10.1%)
ACTION: EUR/USD BUY -73K SELL 50K
We’ll focus on the NFP release today, which is expected at -3K with a previous release of -11K; if you remember what happened last NFP, you’d know that the last release surprised the market and revived the end of the year USD rally and caused a major trend change by the much better than expected release of -11K from an expectation of -120K. However, in order for USD to maintain its bullish rally well into 2010, it is important that today’s release is either inline with expectation or in the positive territory.
It’s also important to note the psychological factor of a positive release in NFP. It will not only send out a message that it’s time US economy starts to create jobs, but also confirming the recovery and shatter concerns of double dip recession… this could essentially cause a major shift in monetary reservers as USD is not only considered as safe investoment, but also attractive.
Now let’s talk about how to trade this release: We’ll wait for the numbers to come out, but will not take any trade YET, even if we get our tradable figures (-73K or 50K). We’ll wait for a possible revision to the previous release number, which is -11K, as the market usually overreacts with the Revision; chances favor for this trade to work out if we do not get conflicting releases between the revision and the actual release.
Then the next step is to wait for the Unemployment Rate, which is at 10.1%. If the Unemployment Rate were to surprise higher, we’ll have to really make an executive decision at the time of the release and see what is the primary focus of traders. As long as we don’t surprise the 10.5%, I think the market will probably pay more attention to the NFP release.
One last thing… I have adjusted the trigger today because I feel that if we get a positive 50K of release, it should be enough to drive pro USD sentiment… but in order to SELL USD, I think we need the whole -70K of deviation. Thus the BUY trigger is -73K and the SELL trigger is 50K.
Of course, as usual, I will trade this release live and post the recording back in this blog. Therefore, stay tuned.
DEFINITION
“Measures the change in number of employed people during the previous month, excluding the farming industry. A rising trend has a positive effect on the nation’s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.”
Related posts:
- US NFP (Nonfarm Payroll) Employment Changes 02/05/10
- US NFP (Nonfarm Payroll) Employment Changes 12/04/09
- US Nonfarm Payroll NFP Employment Change 03/05/2010
- US NFP Nonfarm Payroll Employment Change 04/02/10
- Forex News Trading US NFP (Nonfarm Payroll) Employment Change 03/04/11
- Forex News Nonfarm Payroll (NFP) Employment 04/01/11 Analysis
- Forex Strategy For US NFP (Nonfarm Payroll) Employment Change 08/05/11
- Forex News Trading Nonfarm Payroll Employment (NFP) 02/04/11
- Forex News Trading US NPF Nonfarm Payroll Employment 09/02/11
- Forex News Trading NFP Nonfarm Payroll Employment Plan 10/08/10
{ 7 comments… read them below or add one }
Henry. I agree with you. Even UK news don’t work out all the time. The US are only ones that really move the market most of the time.
You told will trade this release live and post the recording back in this blog.. Where is it?
Traded the NFP. Got 80 pips in 10 seconds. I had my ways but I do wonder how can you entered the trade when the move is so fast? How fast is ur brokers\\\\\\\’ execution?
My broker is just normal. I don’t spike trade so I dont really care about that initial spike.
I trade the first spike and hold(after being 20pips up) it but it stopped me out =( in the restracement -$358.80 but then i jump in in the retracement since it has moved only 38 pips from the spike. I close my position(the one i jumped in after retracement) with $593.40 that is $234.20 net after commission. Damn its like somebody has inside info the cad unemployment jump alot 30 sec before the release and the nfp jump 1 min before the report!!.
Trading news rules. I was trading only base technical and technical wayyy to subjective now have turn to the dark force(fundamentals).
Why don\\\’t you trade euro news???
Like:
German retail sales
German unemployment
etc
Raul:
EU news usually don’t move the market as much. I am still not convinced that they are tradable, but if and when they do become tradable, I’ll trade them.
Henry