US NFP Nonfarm Payroll Employment Change 04/02/10
8:30m (NY Time) US NFP Forecast 185K Previous -36K
(Unemployment Rate 9.7%)
ACTION: SELL 100K USD/JPY BUY 250K USD/JPY
We’ll be trading the NFP release today, expected at +185K, with a previous release of -36K. If you remember what occurred during the last NFP release, the market reacted extremely positively for both USD and risk appetite sentiment, as the market was originally expecting a much worse release due to the severe weather. Still, NFP came out better than expected, with a better release on the Unemployment Rate by 0.1%…
USD then went on a bullish rally as the fundamental outlook of the U.S. partially because of the NFP, partially because of the uncertainty of other economies (Greece anyone?), making USD a much better choice or the “lesser evil” choice.
With this NFP release, we could see another push for USD, as this may be the first of a series of positive releases in the U.S. employment sector. As Fed. Chairman Bernanke stated previously that FOMC would be looking to tighten its monetary policy only after job growth, and this certainly should stir speculation up for a stronger USD.
The question now is not if the release will be positive but how positive it will be. Out of the 62 analysts surveyed by Bloomberg, the consensus was 185K positive releases. This is due to many factors, including the recent ISM Purchasing Manager’s Index, weekly drop in unemployment claims, government Census hirings, and the Labor Dept’s data on the rising trend in factory, manufacturing, and service-related jobs.
However, the only argument for a possibly worse release rests on the Wednesday ADP NFP release, which came out at 23K on a +40K expectation. But with ADP’s track record on predicting NFP releases, we could chalk this release up to possible data errors…
Therefore, remember the heavy risk appetite movement throughout the week before the release. We could see some “buy on the rumor and sell on news” reaction after the release if we get somewhat in line with expectations, especially with the reduced liquidity condition in the market during this holiday weekend…
Let’s talk about how to trade this release: We’ll wait for the numbers to come out, but we will not take any trade YET, even if we get our tradable figures (100K or 250K). We’ll wait for a possible revision to the previous release number, which is -36K, as the market usually overreacts with the Revision, and chances favor for this trade to work out if we do not get conflicting releases between the revision and the actual release; at this point, still, stay out of the market.
Then the next step is to wait for the Unemployment Rate, which is at 9.7%. If the Unemployment Rate were to surprise higher, we’d have to make an executive decision at the time of the release and see what the primary focus of traders is. If we don’t get back above the 10.2%, the market will probably pay more attention to the NFP release.
After all of the numbers have been released. Wait for the market to push… then be patient and wait for a decent retracement before getting in. Look for recent support/resistance areas for entry, as high-impact news with various components will usually be extremely volatile. Those who are patient will always get a chance to enter at a much better entry.
DEFINITION
“Measures the change in the 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, is a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.”
Hello, Henry.
Thank you for all the tips you share with us.
However, I crave your indulgence with regards to the question which I’m about to ask. I am still a beginner.
Upon reading your posted signals, I usually have a challenge with accessing Forex Factory in time to get into the trades. Can you please advise me on how you access these releases in ample time?
Thanks.
Get a newswire service such as tradethenews.com
Hello, Henry.
Thank you for all the tips you share with us.
However, I crave your indulgence with regards to the question which I’m about to ask. I am still a beginner.
Upon reading your posted signals, I usually have a challenge with accessing Forex Factory in time to get into the trades. Can you please advise me on how you access these releases in ample time?
Thanks.
Get a newswire service such as tradethenews.com
hello Henri,
i really love the news on trade you always send to me. i have been reading them and they have been working
pls always keep it up.
hello Henri,
i really love the news on trade you always send to me. i have been reading them and they have been working
pls always keep it up.
Hi Henry,
Just watched NFP video ,nicley done good calls sweet trade.
rgds
Hi Henry,
Just watched NFP video ,nicley done good calls sweet trade.
rgds
Hi Henry, thanks for sharing that video and congrats on your profit. however, could you please throw some light on why you decided to go with GBPJPY while you had suggested USDJPY trade in the email!
regards,
siju
GBP/JPY is highly sensitive to risk sentiment, think of it like USD/JPY on steroids. So I always like to trade either EY or GY instead of UY, because you can end up with more pips (although you can end up with more losses too!). Its the same analysis.
Also at the time, Currency Meter showing a stronger GBP and weaker JPY
Hi Henry, thanks for sharing that video and congrats on your profit. however, could you please throw some light on why you decided to go with GBPJPY while you had suggested USDJPY trade in the email!
regards,
siju
GBP/JPY is highly sensitive to risk sentiment, think of it like USD/JPY on steroids. So I always like to trade either EY or GY instead of UY, because you can end up with more pips (although you can end up with more losses too!). Its the same analysis.
Also at the time, Currency Meter showing a stronger GBP and weaker JPY
Hi Henry,
JUst to tell you how much I appreciate what you are doing and also to say thank you for your news analysis and general comment.
Really appreciate it and please do keep up the good work
Hi Henry,
JUst to tell you how much I appreciate what you are doing and also to say thank you for your news analysis and general comment.
Really appreciate it and please do keep up the good work
Hi Henry,
IS there a way i can follow your trades Live ? Do you ahve a trading room or somthing where i can follow you . Thanks, please let me know.
Regards
addy
Addy:
My mentoring class is closed for registration, but I may do something else in about 3 months, so if you just check back at this blog, or better yet, signup for my newsletter, and I’ll make sure to send you an email when my next class becomes available.
Henry
Hi Henry,
your call for (LONG) positionng on the yen crosses worked perfectly well last week.
Pls which direction do you see the crosses expecially GBP/YEN going this week.
thanks
Freddie
I expect GY to move in the same direction early part of the week, but once we get to Wed~Thur, it would be anyone’s guess as both central banks (BOE, ECB) are scheduled to release interest rates.
Henry
Hi Henry,
the video is showing error and not working. can you pls get your It guys to fix it.
rgds
rsm
No its working. Embed from Youtube. Can you watch youtube? If you can’t, then its not working for you.
Hi Henry,
IS there a way i can follow your trades Live ? Do you ahve a trading room or somthing where i can follow you . Thanks, please let me know.
Regards
addy
Addy:
My mentoring class is closed for registration, but I may do something else in about 3 months, so if you just check back at this blog, or better yet, signup for my newsletter, and I’ll make sure to send you an email when my next class becomes available.
Henry
Hi Henry,
your call for (LONG) positionng on the yen crosses worked perfectly well last week.
Pls which direction do you see the crosses expecially GBP/YEN going this week.
thanks
Freddie
I expect GY to move in the same direction early part of the week, but once we get to Wed~Thur, it would be anyone’s guess as both central banks (BOE, ECB) are scheduled to release interest rates.
Henry
Hi Henry,
the video is showing error and not working. can you pls get your It guys to fix it.
rgds
rsm
No its working. Embed from Youtube. Can you watch youtube? If you can’t, then its not working for you.
Doh!
If only I had learnt about trading news earlier.
I established a bullish position on the USD and a short position on US bonds BEFORE the news release, and the volatility stopped me out – loss money. This is the first time I’ve experienced broker execution risk.
Now I know.
Thanks for your videos, I will be watching the one on the recent NFP release.
Thanks again.
Doh!
If only I had learnt about trading news earlier.
I established a bullish position on the USD and a short position on US bonds BEFORE the news release, and the volatility stopped me out – loss money. This is the first time I’ve experienced broker execution risk.
Now I know.
Thanks for your videos, I will be watching the one on the recent NFP release.
Thanks again.
hi henry, could you provide us with your afterthoughts of this month’s NFP thanks.
I will do that in a post on Sunday. Thanks,
hi henry, could you provide us with your afterthoughts of this month’s NFP thanks.
I will do that in a post on Sunday. Thanks,