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We are going to have NFP tomorrow. What is NFP? well ...
2013-08-02 12:30 GMT | [USD - Non-farm Payrolls]
Forum
Something Interesting in Financial Video June 2013
newdigital, 2013.06.12 13:47
NFP strategies
NFP is Non-farm Payrolls. Personally I traded nfp for few years by EA (for Metatrader 4) and that is why I am uploading this video to this thread.
Yes, nfp trading may be profitable ... but as we can see on the charts on the previous posts so it is very difficult trade nfp nes events. Many traders are not trading during nfp, the other traders are not trading on Friday. But there are some traders (special guys) who are trading nfp only.
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US data announcements trigger volatile trading :
The US dollar is the main focus for forex traders this week with several crucial economic data releases scheduled. On Friday, the US unemployment rate will be revealed and it is predicted that the rate will drop from 7.6% to 7.5%. While this is heading in the right direction, Federal Reserve Chairman Ben Bernanke is unlikely to trim the stimulus until he sees unemployment fall below 7%. The most significant measure of the health of the US economy, however, is the Non-Farm Payrolls (NFP) data, which will also be released on the same day.
Forum
Press review
angevoyageur, 2013.06.04 14:08
This link provided to me by RaptorUK, give me the idea that it would be interesting to have a place here on the site to share such links. So I opened a new topic, it will be moderated to follow the rules as usual, but also about the content.
S&P 500 crosses 1,700 points for the first time
Stocks rose Thursday morning after an encouraging employment report, sending the Standard & Poor's 500 index above 1,700 points for the first time.
The S&P 500, which investors follow closely as a gauge for the rest of the market, was up 18 points in early trading, or 1.1 percent, at 1,704.
The Dow Jones industrial average rose 144 points, or 0.9 percent, to 15,644. The Dow is also at a record high. The Nasdaq composite index rose 37 points, or 1 percent, to 3,664.
All 10 industry sectors in the S&P 500 index rose, led by banks and industrial stocks.
2013-08-02 07:00 GMT (or 09:00 MQ MT5 time) | [EUR - Spanish Unemployment Change]
If actual < forecast = good for currency (for USD in our case)
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Spain Unemployment Continues To Fall
Spain's unemployment declined for the fifth straight month in July, the Labor Ministry said Friday.
The number of registered unemployed fell sharply by 64,866 or 1.36 percent in July from the prior month. The overall unemployment totaled 4.69 million.
The ministry said registered unemployment among young people under 25 declined by 5.6 percent in the last twelve months.
Unemployment in construction decreased 17,310 and dropped by 11,233 in industry. In services, unemployment declined 37,614 and fell 1,063 in the agriculture sector.
EURUSD - Trading the U.S. Non-Farm Payroll (NFP) Report
Trading the News: U.S. Non-Farm Payrolls
What’s Expected:
Time of release: 08/02/2013 12:30 GMT, 8:30 EDT
Primary Pair Impact: EURUSD
Expected: 185K
Previous: 195K
DailyFX Forecast: 180K to 200K
Why Is This Event Important:
The U.S. economy is expected to add another 185K jobs in July and a positive development may spur a rally in the dollar as it raises the outlook for growth. As the Federal Reserve retains its forward-guidance for monetary policy, a strong employment report may further the argument to taper the asset-purchase program, and the central bank may start to lay out a more detailed exit strategy in the coming months as the recovery gradually gathers pace.
Recent Economic Developments
The Upside/Bullish Scenario
As the fundamental developments coming out of the U.S. economy raises the scope of seeing a larger-than-expected rise in NFPs, a faster rate of job growth may encourage the FOMC to adopt a more hawkish tone for monetary policy, and a positive development may prompt a sharp rally in the greenback as the central bank appears to be slowly moving away from its easing cycle.
The Downside/Bearish Scenario
Nevertheless, the persistent slack in the economy may continue to drag on employment, and a weak NFP report may spur a short-term pullback in the USD as market participants weigh the outlook for monetary policy.
Potential Price Targets For The Release
The EURUSD may have carved out a near-term top in July as it falls back from the 61.8% Fibonacci retracement around 1.3340, and the pair may continue to give back the rebound from 1.2754 should a strong NFP report further the Fed’s argument to scale back on quantitative easing. However, as a dismal employment print dampens the appeal of the reserve currency, a weaker-than-expected NFP report may spark another run at resistance (1.3340) as it raises the scope of seeing the FOMC delay its exit strategy.
How To Trade This Event Risk
Expectations for another 185K rise in Non-Farm Payrolls instills a bullish outlook for the reserve currency, and the market reaction may pave the way for a long U.S. dollar trade as the data heightens the scope of seeing the Fed scale back on QE. Therefore, if NFPs come in-line with or top market expectations, we will need to see a red, five-minute candle following the release to generate a sell entry on two-lots of EURUSD. Once these conditions are fulfilled, we will set the initial stop at the nearby swing high or a reasonable distance from the entry, and this risk will establish our first objective. The second target will be based on discretion, and we will move the stop on the second lot to cost once the first trade hits its mark in order to preserve our profits.
In contrast, the ongoing slack in the real economy may continue to drag on job growth, and a dismal print may dampen the appeal of the greenback as it fuels speculation for additional monetary support. As a result, if the labor data disappoints, we will implement the same trade setup for a long euro-dollar trade as the short position mentioned above, just in reverse.
Impact that the U.S. Non-Farm Payrolls report has had on USD during the last month
(1 Hour post event )
(End of Day post event)
June 2013 U.S. Non-Farm Payrolls
Employment in the world’s largest economy increased another 195K in June following the revised 195K rise the month prior, while the jobless rate held steady at an annualized 7.6% for the second consecutive month as discouraged workers returned to the labor force. The better-than-expected print propped up the greenback, with the EURUSD slipping below the 1.2850 region, and the reserve currency held rather steady throughout the North American trade as the pair closed at 1.2828.
According to Sean Callow, FX Strategist at Westpac, with upbeat ADP survey and ISM surveys as the backdrop, "expectations for US non-farm payrolls are almost certainly higher than the 185K median forecast on Bloomberg. which shows a range from 159K to 209K."
Callow adds: "Clearly much is at stake for USD, with the FOMC mostly noncommittal on Wed, raising the importance of the two jobs report before the Sep 17-18 meeting. But the Fed will also be watching its preferred inflation measure, the core PCE deflator. Consensus for June is 0.1% m/m, 1.1% y/y."
2013-08-02 12:30 GMT | [USD - Non-farm Payrolls]
If actual > forecast = good for currency (for USD in our case)
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U.S. Unemployment Rate Drops Despite Disappointing Job Growth
Employment in the U.S. increased by less than economists had expected in the month of July, according to a report released by the Labor Department on Friday, although the unemployment rate still fell to its lowest level in over four years.
The Labor Department said non-farm payroll employment increased by 162,000 jobs in July following a downwardly revised increase of 188,000 jobs in June.
Economists had expected employment to increase by about 175,000 jobs compared to the addition of 195,000 jobs originally reported for the previous month.
Despite the weaker than expected job growth, the unemployment rate dipped to 7.4 percent in July from 7.6 percent in June. The unemployment rate had been expected to edge down to 7.5 percent.
With the bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 7.3 percent in December of 2008.
Commenting on the impact of the report, Sal Guatieri, Senior Economist at BMO Capital Markets, said, "While we still lean toward the Fed announcing a tapering of asset purchases in September, we will need to see a good bounce in August employment and in the economic data to get there."
"Although the unemployment rate has moved lower, the recent economic softness will raise doubts among policymakers about whether this progress can be sustained," he added.
The job growth in July reflected the addition of 157,000 jobs in the service-providing sector, although that reflects a slowdown from the increase of 188,000 jobs in June.
While the report showed an acceleration in the pace of job growth in the retail sector, fewer jobs were added in the temporary help services and healthcare and social assistance sectors.
The Labor Department also said averagely hourly employee earnings edged down $0.02 to $23.98 in July after jumping by $0.10 in June. Average hourly earnings are still up by 1.9 percent year-over-year.
Happy weekend
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Quick question: Can you tell the difference between “imminent” and “imaginary” trends in the markets?
It’s an important consideration, if you are a market timer at heart. For instance, a lot of folks bought gold in the last few years on the presumption that its ultimate triumph over all other asset classes was imminent.
That one turned out to be imaginary, at least for now. Something similar happened to Apple stock investors. Once it broke that $1 trillion market cap, boy, the sky was the limit! Also, sadly for some, an imaginary outcome.
If you’re going to be a market timer, you have have to be able to forecast the future. It’s a feat many people attempt every single day on financial cable TV.
They rarely get checked on those market direction calls, of course. But you know the language they use:
And so on and so forth, filling up the airwaves with tons of blather quickly forgotten. Mostly, it’s money managers and, on occasion, business world celebrities and other well-known faces.
Limelight
Some of these folks are serious about managing money. Many are not. Everything they discuss is, by definition, imminent. In practice, it’s often also imaginary. As it turns out, these are not mutually exclusive categories.
So can anyone be a market timer? Sure, by trading trends in reverse. Rather than attempting to predict what will happen next, you own the market — using a variety of investments and asset classes via index funds — and just wait.
Eventually, the big wheels of the money world will turn, moving capital from one part of the market to another. Hedge funds do their thing. Big institutional investors get pushed around by changes in their models. People retire and cash out. Others come in to buy.
A smart investor waits for opportunities to appear, and those opportunities are far more obvious in the rear-view mirror. As your initial portfolio gets distorted by events, you will be handed chance after chance to sell gainers and buy other, “unloved” assets on the cheap.
A simple approach
You don’t have to go all in to make it work. Just shave off the upside and buy things on the downside as you go using a simple rebalancing approach. Keep costs low and be patient. In time, your chance to make the trades that matter will appear.
There’s little glory in incremental moves, I know. But a low-cost, low-stress trading portfolio using inexpensive ETFs can get you the compounding return performance you need to retire on time, no TV watching required.
Forex - Weekly outlook: August 5 - 9
The dollar ended Friday’s session mostly lower against its major counterparts after weaker-than-forecast U.S. jobs data dampened expectations that the Federal Reserve will start to unwind its stimulus program by the year's end.
The Department of Labor said the U.S. economy added 162,000 jobs in July, less than the 184,000 increase forecast by economists. June's figure was revised down to 188,000 from a previously reported 195,000.