TheNews

Trading the News: U.S. Non-Farm Payrolls

A 160K expansion in U.S. Non-Farm Payrolls (NFP) paired with a downtick in the jobless rate may boost the appeal of the greenback and spur a larger pullback in EUR/USD as it fuels expectations for an imminent Fed rate-hike.

What’s Expected:

Why Is This Event Important:

The Federal Open Market Committee (FOMC) may implement higher borrowing-costs over the coming months especially as the U.S. economy approaches ‘full-employment,’ but signs of stagnant wage growth may encourage the central bank to further delay its normalization cycle as officials warn ‘survey-based measures of longer-run inflation expectations were little changed, on balance, in recent months, while market-based measures of inflation compensation were still low.’

How To Trade This Event Risk

Bullish USD Trade: NFP Expands 160K+, Unemployment Rate Narrows

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

Bearish USD Trade: U.S Employment Report Fails to Meet Market Expectations

• Need green, five-minute candle to favor a long EUR/USD trade.
• Implement same setup as the bullish dollar trade, just in the opposite direction.

Potential Price Targets For The Release[/U]
[U]EURUSD Daily

• Even though EUR/USD remains stuck in a narrow range, the longer-term upward trend may reassert itself over the coming days as price & the Relative Strength Index (RSI) fail to preserve the bearish formation from early May.
• Key Resistance: 1.1760 (61.8% retracement) to 1.1810 (38.2% retracement)
• Key Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

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