Trading News Events

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

Another 190K expansion in Non-Farm Payrolls (NFP) may boost the appeal of the greenback as the U.S. economy approaches ‘full-employment,’ but a marked slowdown in wage growth may fuel the near-term rally in EUR/USD as it dampens bets for a Fed rate-hike in the first-half of 2016.

What’s Expected:

Why Is This Event Important:

Even though the Federal Open Market Committee (FOMC) appears to be on course to implement higher borrowing-costs over the coming months, the disinflationary environment across the major industrialized economies may keep the Fed on the sidelines for most of the year as central bank officials look for greater evidence of achieving the 2% target for price growth.

However, the persistent slack in private-sector consumption paired with the rise in planned job-cuts may drag on employment, and a soft labor report along with a marked slowdown in wage growth may spark a further depreciation in the dollar as market participants push out bets for the next Fed rate-hike.

How To Trade This Event Risk

Bullish USD Trade: NFP Climbs 190K+, Hourly Earnings Highlight Sticky Wage Growth

• 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 Forecast

• 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
EURUSD Daily

• Even though the diverging paths for monetary policy casts a long-term bearish outlook for EUR/USD, the pair may test the broad range from the previous year as it appears to be breaking out of the downward trend carried over from the end of 2014; will keep a close eye on the Relative Strength Index (RSI) as it approaches overbought territory, with a break above 70 highlighting the risk for a further advance in the exchange rate.
• Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
• Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

December 2015 U.S. Non-Farm Payrolls
EURUSD M5: 57 pips price movement by USD - U.S. Non-Farm Employment Change news event:

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Originally Posted by TheNews

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

EURUSD M5: 105 pips range price movement by Non-Farm Employment Change news event:

Trading the News: U.K. Jobless Claims Change

Despite forecasts for another 3.0K decline in U.K. Jobless Claims, a further slowdown in Average Weekly Earnings may weigh on the sterling and spark a bearish reaction in GBP/USD as it provides the Bank of England (BoE) with greater scope to retain its current policy throughout 2016.

What’s Expected:

Why Is This Event Important:

Following the unanimous vote to retain the current policy, signs of slower wage growth may encourage the BoE to endorse a wait-and-see approach at the next meeting on March 17 as Governor Mark Carney & Co. reduce their economic projections and turn increasing cautious towards the U.K. economy.

Nevertheless, improved confidence paired with the ongoing expansion in private-sector lending may generate a stronger-than-expected job/wage report, and a positive development may foster a near-term rebound in GBP/USD as it puts increase pressure on the BoE to remove the record-low interest rate in 2016.

How To Trade This Event Risk

Bearish GBP Trade: Jobless Claims, Average Hourly Earnings Disappoint

• Need red, five-minute candle following the print to consider a short GBP/USD trade.
• If market reaction favors selling sterling, short GBP/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.

Bullish GBP Trade: U.K. Job/Wage Growth Exceed Market Forecast

• Need green, five-minute candle to favor a long GBP/USD trade.
• Implement same setup as the bearish British Pound trade, just in reverse.

Potential Price Targets For The Release
GBPUSD Daily

• GBP/USD may continue to give back the rebound from 1.4078 as it struggles to retain the range-bound price action from earlier this month, while the Relative Strength Index (RSI) breaks down from the bullish formation carried over from January.
• Interim Resistance: 1.4910 (61.8% retracement) to 1.4930 (38.2% expansion)
• Interim Support: 1.3870 (78.6% expansion) and 1.4000 pivot

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Trading the News: U.S. Consumer Price Index (CPI)

A marked pickup in the U.S. Consumer Price Index (CPI) may heighten the appeal of the dollar and spark a further decline in EUR/USD as it puts increased pressure on the Federal Open Market Committee (FOMC) to implement higher borrowing-costs in 2016.

What’s Expected:

Why Is This Event Important:

Signs of stronger price growth may encourage the Fed to further normalize monetary policy over the coming months especially as the U.S. economy approaches ‘full-employment,’ while Chair Janet remains confident in achieving the 2% inflation target over the policy horizon.

Nevertheless, waning confidence paired with the slowdown in private-sector activity may drag on price growth, and a dismal development may produce near-term headwinds for the greenback as market participants push out bets for the next Fed rate-hike.

How To Trade This Event Risk

Bullish USD Trade: CPI Climbs to 1.3% or Higher, Core Inflation Remains Sticky

• Need to see red, five-minute candle following the release 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.

Bullish USD Trade: Inflation 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
EURUSD Daily

• Even though the diverging paths for monetary policy casts a long-term bearish outlook for EUR/USD, the pair may continue to retrace the decline from the previous year as it breaks out of the downward trend from late-2014, while the Relative Strength Index (RSI) preserves the bullish formation carried over from November.
• Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
• Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

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Trading the News: U.K. Gross Domestic Product (GDP)

The U.K.’s Gross Domestic Product (GDP) report may heighten the bearish sentiment surround British Pound and fuel the near-term decline in GBP/USD should the data encourage the Bank of England (BoE) to further delay its normalization cycle.

What’s Expected:

Why Is This Event Important:

Even though BoE officials sees a ‘solid’ recovery in the U.K. and talk down bets for additional monetary support, the downside risk surrounding the economic outlook may prompt the Monetary Policy Committee (MPC) to retain its current policy throughout 2016 as the central bank struggles to achieve the 2% target for inflation.

Nevertheless, increased demand from home and abroad may encourage a stronger-than-expected GDP print, and an unexpected upward revision in the growth rate may spur a near-term rebound in GBP/USD as the fundamental outlook for the U.K. improves.

How To Trade This Event Risk

Bearish GBP Trade: U.K. Expands Annualized 1.9% or Less

• Need red, five-minute candle following the GDP report to consider a short British Pound trade.
• If market reaction favors bearish sterling trade, short GBP/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.

Bullish GBP Trade: GDP Report Beats Market Expectations

• Need green, five-minute candle to favor a long GBP/USD trade.
• Implement same setup as the bearish British Pound trade, just in reverse.

Potential Price Targets For The Release
GBPUSD Daily

• Even though the BoE moves away from its easing cycle, the long-term outlook for GBP/USD remains tilted to the downside as price & the Relative Strength Index (RSI) retain the bearish formations carried over from the previous year.
• Interim Resistance: 1.4910 (61.8% retracement) to 1.4930 (38.2% expansion)
• Interim Support: 1.3870 (78.6% expansion) and 1.4000 pivot

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Trading the News: U.S. Gross Domestic Product (GDP)

The preliminary U.S. 4Q Gross Domestic Product (GDP) report may produce headwinds for the greenback and spark a near-term a rebound in EUR/USD should the report highlight a slowing recovery in the world’s largest economy.

What’s Expected:

Why Is This Event Important:

Even though the U.S. approaches ‘full-employment,’ a marked downward revision in the growth rate may undermine Fed expectations for a ‘consumer-led’ recovery, and the central bank may largely endorse a wait-and-see approach throughout 2016 in an effort to mitigate the downside risks surrounding the region.

Nevertheless, the pickup in private-sector consumption may generate a better-than-expected GDP print as it remains one of the leading drivers of growth, and signs of a more meaningful recovery may boost the appeal of the greenback as it puts increased pressure on the Fed to implement higher borrowing-costs over the coming months.

How To Trade This Event Risk

Bearish USD Trade: 4Q GDP Slows to Annualized 0.4% or Lower

• Need to see green, five-minute candle following the GDP report to consider a long trade on EURUSD.
• If market reaction favors a short dollar trade, buy EURUSD with two separate position.
• Set stop at the near-by swing low/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.

Bullish USD Trade: Growth, Inflation Top Market Expectations

• Need red, five-minute candle to favor a short EURUSD trade.
• Implement same setup as the bearish dollar trade, just in the opposite direction.

Potential Price Targets For The Release
EURUSD Daily

• Even though the deviating paths for monetary policy fosters a long-term bearish outlook for EUR/USD, the pair may continue to retrace the decline from 2015 and work its way back towards the October high (1.1494) as it breaks out of the holding pattern from earlier this year.
• Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
• Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

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

Another 195K expansion in Non-Farm Payrolls (NFP) may heighten the appeal of the greenback and spur a near-term decline in EUR/USD as the ongoing improvement in the labor market puts increased pressure on the Federal Open Market Committee (FOMC) to further normalize monetary policy in 2016.

What’s Expected:

Why Is This Event Important:

With the U.S. economy approaching ‘full-employment,’ signs of sticky wage growth may encourage the FOMC to implement higher borrowing-costs over the coming months as Chair Janet Yellen remains confident in achieving the 2% inflation-target over the policy horizon.

Nevertheless, waning business confidence accompanied by fears of a slowing recovery may drag on hiring, and a dismal NFP report may produce increased headwinds for the dollar as market participants push out bets for the next Fed rate-hike.

How To Trade This Event Risk
Bullish USD Trade: NFP Climbs 195K+ Accompanied by Sticky Wage Growth

• 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 Falls Short of 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
EURUSD Daily

• EUR/USD may continue to consolidate within the 2015 range following the failed run at the October high (1.1494), but the pair stands at risk of facing near-term headwinds as market participants anticipate the European Central Bank (ECB) to implement more non-standard measures at the March 10 interest rate decision.
• Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
• Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

Impact that the U.S. Non-Farm Payrolls report has had on EUR/USD during the previous month
EURUSD M5: 133 pips range price movement by Non-Farm Employment Change news event:

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Trading the News: Canada Net-Change in Employment

The near-term rebound in USD/CAD may largely unravel over the next 24-hours of trade should Canada’s Employment report highlight an improved outlook for the region and encourage the Bank of Canada (BoC) to move away from its easing cycle.

What’s Expected:

Why Is This Event Important:

A 10.0K rebound in Canada Employment may heighten the appeal of the loonie as BoC Governor Stephen Poloz adopts a more optimistic outlook for the real economy, and the central bank may endorse a wait-and-see approach throughout 2016 as the risks surrounding the region are ‘roughly balanced.’

How To Trade This Event Risk
Bullish CAD Trade: Canadian Employment Rebounds 10.0K or Greater

• Need red, five-minute candle following the report to consider a short trade on USD/CAD.
• If market reaction favors a bullish loonie trade, sell USD/CAD 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 CAD Trade: Labor Report Fails to Meet Market Expectations

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

Potential Price Targets For The Release
USD/CAD Daily

• Long-term outlook for USD/CAD remains tilted to the upside as the pair preserves the ascending channel formation from back in 2014, but pair stands at risk of retracing the rebound from the October low (1.2831) as long as the Relative Strength Index (RSI) retains the bearish formation carried over from the previous month.
• Interim Resistance: 1.4660 (78.6% retracement) to 1.4730 (78.6% expansion)
• Interim Support: 1.2860 (78.6% retracement) to 1.2930 (61.8% expansion)

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Trading the News: U.K. Jobless Claims Change

Another 9.1K decline in U.K. Jobless Claims paired with signs of stronger wage growth may heighten the appeal of the British Pound and spur a near-term advance in GBP/USD as it puts increased pressure on the Bank of England (BoE) to normalize monetary policy sooner rather than later.

What’s Expected:

Even though the EU referendum clouds the economic outlook for the U.K., a further improvement in labor-market dynamics may spur a split within the Bank of England (BoE) as central bank officials remain upbeat on the economy and see a risk of overshooting the 2% inflation-target over the policy horizon.

Nevertheless, waning confidence along with the slowdown in service-based activity may drag on employment, and a dismal labor report may produce near-term headwinds for the sterling as it market participants push out bets for a BoE rate-hike.

How To Trade This Event Risk
Bullish GBP Trade: U.K. Job/Wage Growth Exceed Market Forecast

• Need green, five-minute candle following the print to consider a long GBP/USD trade.
• If market reaction favors buying sterling, long GBP/USD with two separate position.
• Set stop at the near-by swing low/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 GBP Trade: Jobless Claims, Average Hourly Earnings Disappoint

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish British Pound trade, just in reverse.

Potential Price Targets For The Release
GBPUSD Daily

• Long-term outlook for GBP/USD remains tilted to the downside as the pair largely retains the downward trend from August, but there appears to be a divergence in the Relative Strength Index (RSI) as the oscillator carves a higher-low in February and threatens the bearish formation carried over from the previous year.
• Interim Resistance: 1.4910 (61.8% retracement) to 1.4930 (38.2% expansion)
• Interim Support: 1.3870 (78.6% expansion) and 1.4000 pivot

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Trading the News: Federal Open Market Committee (FOMC) Federal Funds Rate Decision

Even though the Federal Open Market Committee (FOMC) is widely expected to retain its current policy in March, the updated forecasts for growth, inflation and the interest rate may instill a bullish outlook for the U.S. dollar should the central bank stay on course to implement higher borrowing-costs in 2016.

What’s Expected:

Why Is This Event Important:

The FOMC may continue to prepare U.S. households and businesses for higher interest rates especially as the economy approaches ‘full-employment,’ and the central bank may sound more hawkish this time around as Chair Janet Yellen remains confident in achieving the 2% inflation-target over the policy horizon.

However, waning confidence paired with subdued wage growth may prompt to Fed to adopt a more cautious tone this time around, and the dollar stands at risk of facing near-term headwinds should the central bank show a greater willingness to further delay the normalization cycle.

How To Trade This Event Risk
Bullish USD Trade: FOMC to Stay on Course to Further Normalize Policy in 2016

• Need red, five-minute candle following the rate decision to consider a short EUR/USD position.
• 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 cost; at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is met, set reasonable limit.

Bearish USD Trade: Fed Curbs Expectations for Higher Borrowing-Costs

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

Potential Price Targets For The Release
EURUSD Daily

• Indeed, the diverging paths for monetary policy fosters a long-term bearish outlook for EUR/USD especially as the European Central Bank (ECB) continues to push monetary policy into uncharted territory, but the pair appears to be carving out a bullish-flag formation (continuation pattern) as it holds above the range from earlier this month.
• Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
• Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

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