US Nonfarm Payroll Changes 08/07/09

8:30am (NY Time) US NonFarm Payroll  Forecast -320K  Previous -467K
ACTION: USD/JPY           BUY -250K      SELL -400K

Our first focus will be on the Headline Number, which is expected to be at -320K.  Wait for the numbers to come out, but do not take the trade YET, even if we get -400K or -250K.  Now wait for the revision number, which is -467K.  Market is likely to overract with the Revision number, so if the revision does not conflict with the release, we get a better chance of this trade working out.

Then the next step is to wait for the Unemployment Rate, which is at 9.6%.  Be careful with this number as I have seen market focus on this number more than the actual NFP release in the event of a huge surprise.

If we get a good number and a bad number, or a conflict with the rate of unemployment and jobs lost, always look at the revision.  If the revision if big, then that would probably be the trend where the market is going to go.

As the NFP release will directly influence Fed’s definition of economic recovery, a better than expected number will definitely spark expectations of rate hikes, or at least possible beginning of rate hiking cycle and USD strength, we’ll likely see a pretty confused market, therefore make sure to use small take profit targets and remain flexible in your trading.

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.

UPDATE: NFP came out at -247K, Revision was -443K, and Unemployment went down to 9.4%.  This was a landslide risk appetite release as I quickly turn my attention to the GBP/JPY pair for LONG trades.  I made over 40+ pips on record, but in the trade room we were able to make 100+ as we held the trade as GY break above 162. 

Watch the video as I go through the reason for this trade, how to calculate the right retracement point, and my views of the future of news trading.  If you like this video so don’t forget to leave me some comments.

[flv:http://www.newsprofiteer.com/080709-usnfp/080709-usnfp.mp4 480 360]

Related posts:

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4. US NFP (Nonfarm Payroll) Employment Changes 12/04/09
5. US NFP (Nonfarm Payroll) Employment Changes 01/08/10
6. Trading The U.S. Nonfarm Payroll 06/04/10
7. US NFP Nonfarm Payroll Employment Change 04/02/10
8. US Nonfarm Payroll NFP Employment Change 03/05/2010
9. Forex News Trading Nonfarm Payroll Employment (NFP) 02/04/11
10. Forex News Trading US NFP (Nonfarm Payroll) Employment Change 03/04/11

Tagged as: economic health, Employment, Employment Sector, Forex, Forex News, fundamental outlook, gbp jpy, Job's Market, JPY, NFP, Nonfarm Payroll, pips, profit targets, rate hikes, revision, risk appetite, trade, Unemployment, Unemployment Rate, US, USD