News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • US Equity Update (Wednesday Close): $DJI +1.20% $SPX +0.82% $NDX +0.84% $RUT +0.20% $VIX -0.42%
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.15% US 500: -0.19% FTSE 100: -0.22% Germany 30: -0.37% France 40: -0.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/ER57B8vlcm
  • Following last night's debate, the Commission on Presidential Debates (CPD) announced today that they: "will be carefully considering the changes that it will adopt and will announce those measures shortly". #PresidentialDebate2020
  • USD strength has shown in September but that’s been a change-of-pace to the bigger-picture trend of weakness. Which will take over in Q4? Get your $USD market update from @JStanleyFX here:https://t.co/BAFre6au9x https://t.co/SL8kg2GlH0
  • Pelosi says stimulus talks with Mnuchin will continue - BBG
  • Update on #Cryptocurrencies #BITCOIN -0.55% #BITCOINCASH -0.35% #ETHEREUM -0.68% #RIPPLE -0.46% #LITECOIN +1.08%
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.28% Gold: -0.31% Silver: -3.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/E9jn9lVQkj
  • US Dollar: Ready to Rumble with High-Impact Data - EURUSD, AUDUSD https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2020/09/30/US-Dollar-USD-Ready-to-Rumble-High-Impact-Data-EUR-USD-AUD-USD.html https://t.co/4NyN3ROIwJ
  • Senator McConnell signals that a deal is still far off on stimulus $SPX $DJI $DXY
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.18%, while traders in Wall Street are at opposite extremes with 69.58%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/cF2BM1c9q9
EUR/USD Rebound Vulnerable to Upbeat Non-Farm Payroll (NFP) Report

EUR/USD Rebound Vulnerable to Upbeat Non-Farm Payroll (NFP) Report

2016-09-02 08:00:00
David Song, Strategist
Share:

- U.S. Non-Farm Payrolls to Print Below 200K for First Time Since May.

- Average Hourly Earnings to Slow for First Since March.

For more updates, sign up for David's e-mail distribution list.

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

A 180K expansion in U.S. Non-Farm Payrolls (NFP) accompanied by a downtick in the jobless rate may trigger 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 raise the benchmark interest rate sooner rather than later.

What’s Expected:

DailyFX Calendar

Click Here for the DailyFX Calendar

Why Is This Event Important:

The next interest-rate decision on September 21 may reveal a growing dissent within the FOMC as Chair Janet Yellen argues ‘the case for an increase in the federal funds rate has strengthened in recent months,’ but a marked slowdown in Average Hourly Earnings may drag on interest-rate expectations as the committee persistently warns ‘most survey-based measures of longer-run inflation expectations were little changed, on balance, while market-based measures of inflation compensation remained low.

Expectations: Bullish Argument/Scenario

Release

Expected

Actual

Pending Home Sales (MoM) (JUL)

0.7%

1.3%

Housing Starts (MoM) (JUL)

-0.8%

2.1%

NFIB Small Business Optimism (JUL)

94.5

94.6

The pickup in business confidence paired with the resilience in the U.S. housing market may foster a stronger-than-expected NFP report, and a positive development may spark a bullish reaction in the dollar as it boosts bets for an imminent rate-hike.

Risk: Bearish Argument/Scenario

Release

Expected

Actual

ISM Manufacturing (AUG)

52.0

49.4

Gross Domestic Product (Annualized) (QoQ) (2Q P)

1.1%

1.1%

Advance Retail Sales (JUL)

0.4%

0.0%

However, slowing outputs paired with the weakening outlook for global growth may drag on job/wage growth, and a series of dismal data prints may produce near-term headwinds for the greenback as it raises the Fed’s scope to further delay the normalization cycle.

How To Trade This Event Risk(Video)

Bullish USD Trade: NFP Expands 180K or Greater

  • Need red, five-minute candle following the print 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 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. Job/Wage growth Disappoints

  • 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

EUR/USD Daily

EUR/USD Daily Chart
  • Failure to preserve the bullish formation from the end of July may spur a larger decline in EUR/USD especially as the Relative Strength Index (RSI) follows suit, with a break/close below 1.1110 (50% retracement), which also lines up with the 200-Day SMA (1.1114), raising the risk for a move back towards the July low (1.0951).
  • 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)

Check out the short-term technical levels that matter for USD/JPY heading into the report!

Avoid the pitfalls of trading by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders" series.

Impact that the U.S. NFP report has had on EUR/USD during the previous release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JUL 2016

08/05/2016 12:30 GMT

180K

255K

-82

-59

July 2016 U.S. Non-Farm Payrolls (NFP)

EUR/USD 5-Minute

EUR/USD Chart

U.S. Non-Farm Payrolls (NFP) increased another 255K in July following the revised 292K expansion the month prior, while the jobless rate held steady at an annualized 4.9% as the Labor Force Participation Rate climbed to 62.8% from 62.7% during the same period. Moreover, Average Hourly Earnings crossed the wires at an annualized 2.6% to mark the fastest pace of growth for 2016, while a separate report showed the U.S. Trade Balance deficit widened to $44.5B from a revised $41.0B in May. The greenback advanced following the better-than-expected print, with EUR/USD slipping below the 1.1100 handle to end the day at 1.1082.

Get our top trading opportunities of 2016 HERE

Read More:

S&P 500: Yellen Sparks Volatility, Market Starts Week at Pivotal Area

USD/JPY Technical Analysis: Implied Vol Shows Trader’s Nerves

EUR/JPY Technical Analysis: Sticking to the Range

EURUSD: Waiting for the Dip & Rip- Key Resistance at 1.1400

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES