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8:30m (NY Time) US NFP (Nonfarm Payroll) Changes       Forecast 10K       Previous -85K
(Unemployment Rate 10.0%)

ACTION: EUR/USD               SELL -60K USD/JPY                 SELL 80K EUR/USD

We’ll be trading the NFP release today, which is expected at +10K with a previous release of -85K; if you remember what happened last NFP, you’d know that the last release disappointed the market and kept USD under pressure for the better part of the months as after a revision of November NFP to a positive number, the December release brought back concerns over the rate of economic recovery.  At the time of writing this analysis, market is in full risk aversion mode.

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.