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. See our updated Privacy Policy here.

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
Subscribe
Please try again
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
More View more
Real Time News
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/1xhewkdV21
  • (USD Weekly Tech) US Dollar Dominant Uptrend Back In Focus: EUR/USD, USD/JPY, NZD/USD, USD/CHF https://www.dailyfx.com/forex/technical/article/special_report/2021/09/20/US-Dollar-Dominant-Uptrend-Back-In-Focus-EURUSD-USDJPY-NZDUSD-USDCHF.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/IpwzBGCi7P
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/qv8keXFzHZ
  • Join @IlyaSpivak at 22:00 EST/2:00 GMT for his cross-market weekly outlook webinar. Register here: https://t.co/MKGHc9ae64 https://t.co/JMlT0Wn3DK
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/sbejkd7XT5
  • *Reminder: Weekly Strategy Webinar Monday morning at 8:30am ET - https://t.co/lxd5fZnn4H Mid-Week Market Update on Wednesday at 9:30am ET - https://t.co/8SFBJxNZrA
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/CJR61cljOe
  • (AUD Weekly Tech) Australian Dollar May Wilt, Downtrends Resume: AUD/USD, AUD/JPY, AUD/NZD, AUD/CAD https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/09/19/Australian-Dollar-May-Wilt-Downtrends-Resume-AUDUSD-AUDJPY-AUDNZD-AUDCAD.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/DedoOKJMXh
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUuBpt https://t.co/GQB0ic9Ahe
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/lx3cMSpZNc
What the NFPs Can and Cannot Do For the Dollar, S&P 500

What the NFPs Can and Cannot Do For the Dollar, S&P 500

John Kicklighter, Chief Strategist

Talking Points:

  • There is no doubt that the NFPs - and various US BLS labor statistics - garner some of the greatest speculative attention
  • The payrolls change has become a self-fulfilling prophecy of speculative charge, but deeper economic implications rarely bubble up
  • For the Dollar, rate expectations is the key aspects; but market implied yields through year end are already rising without USD

Are you watching or trading the upcoming US NFPs release? Join the DailyFX Analysts as they cover the release and analyze the market reaction live. Sign up for the event on the DailyFX Webinar Calendar page.

The monthly US nonfarm payrolls (NFPs) report is celebrated by volatility spotters as one of the most media-hyped events of the calendar month and thereby one of the greatest opportunities for market tumult to trade through. That said, even in the best of times - where liquidity is filled out, markets are less skeptical of value, and the deeper themes this report can tap are fluid - the event risk is disadvantaged. It is released on the first Friday of the month typically which means we have to absorb it in the twilight of the week's liquidity. So, either we get a strong jolt of short-term speculation or we get the motivation for a trend that will continue beyond the weekend. Neither scenario is going to be particularly easy to achieve in our current conditions. First and foremost, we may be wading into the new trading year; but market depth is still restrained by the previous months holiday trade - the deepening sense of complacency over the past year certainly making that difficult.

Speculators, nonetheless, are drawn to opportunities of sharp price movement in this general drought of significant price swings. That said, the greatest potential in this labor report is in the short-term impact it can achieve through risk trends. There are a range of assets that represent the rise and fall of sentiment, but a benchmark like the Yen-based carry trades or junk bonds will be less enthusiastic to response because the implications are more ancillary or they simply aren't near critical technical levels. That is not true for US equity indices though. The major indices from the S&P 500 to the Dow to the Nasdaq all hit record highs this past session. That sets up exaggerated views on already richly priced benchmarks. It could certainly cater to further extend the 'risk on' charge for a short burst. However, the more influential outcome from this data would be a substantial disappointment that triggers concern about the economic engine that should be powering this capital market climb. I say 'should' because the market participants that are currently more prevalent are short-term speculators who care less about the traditional measures of 'value' and more about what they think others would emphasize.

For the Dollar, there are various implications of influence through this data. Yet, the theme that FX speculators will default to is the interpretation of interest rate expectations. In the most academic sense, an improvement in employment trends (NFP beat, drop in jobless rate, rise in wages) translates into faster increases in interest rates and vice versa. Yet, the outlook for monetary policy is increasingly diverging from this economic node and the market instead seems to have a distaste for the Dollar whether the Fed offers a growing yield advantage or not. In fact, the implied yield forecast from Fed Fund futures through the year end has recently surpassed 1.9 percent to close the discount to the Fed's own forecasts. And yet, the Greenback continues to struggle. It is not as clear about what surprise - bullish or bearish - will have the greater impact on the Dollar in terms of sheer volatility like it would for equities and risk assets. We discuss trading the upcoming NFPs to set expectations for reasonable trading in today's Strategy Video.

What the NFPs Can and Cannot Do For the Dollar, S&P 500What the NFPs Can and Cannot Do For the Dollar, S&P 500What the NFPs Can and Cannot Do For the Dollar, S&P 500

To receive John’s analysis directly via email, please SIGN UP HERE

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

DISCLOSURES