TheNews

Trading the News: U.S. Non-Farm Payrolls (NFP)



A 180K expansion in U.S. Non-Farm Payrolls (NFP) paired a pickup in household earnings may trigger a near-term pullback in EUR/USD as it puts pressure on the Federal Open Market Committee (FOMC) to further normalize monetary policy sooner rather than later.

Why Is This Event Important:

With the U.S. economy approaching full-employment, signs of higher wage growth may encourage Chair Janet Yellen and Co. to deliver three rate-hikes in 2017 as the central bank remains confident in reaching the 2% inflation-target over the policy horizon. In turn, the dollar may exhibit a more bullish behavior ahead of the next rate decision on September 20 as the ‘the Committee expects to begin implementing its balance sheet normalization program relatively soon.’

How To Trade This Event Risk

Bullish USD Trade: U.S. Adds 180K Jobs or More, Wage Growth Picks in August

• Need a red, five-minute candle subsequent to the fresh figures to consider a short EUR/USD position.
• If the market reaction favors a bullish dollar trade, sell EUR/USD with two separate lots.
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to breakeven on remaining position once initial target is met, set reasonable limit.

Bearish USD Trade: NFP Report Falls Short of Market Expectations

• Need a green, five-minute EUR/USD candle to consider a short dollar position.
• Implement the same approach as the bullish dollar trade, just in the opposite direction.

Potential Price Targets For The Release
EUR/USD Daily Chart



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