Henry Liu
Former FPA Special Consultant
- Messages
- 473
ADP or Automatic Data Processing (NASDAQ:ADP) is releasing it’s own estimate for the private sectors of NFP (Nonfarm Payroll). This is high impact release and it’s followed by currency traders as they look for hints on Friday's NFP official release. Here’s the forecast:
8:15am NY Time US ADP NFP Change Forecast 38K Previous 13K
ACTION: USD/JPY BUY 90K SELL -10K
The Trade Plan
I usually don’t trade the ADP figure as I use this release for future market trend references, and I assume that most investors are likely to do the same, but if the deviation of 50K is actually hit, true speculators will probably have not problem jumping into the market, and this will undoubtedly change market perception on Friday’s NFP release; therefore it is best to be around your computer during the release time rather than finding out what happened hours later and perhaps missed the entire movement.
With the above being said, if we get 90K or better release, I'd be looking to BUY USD/JPY; if we get a -10K or worse, then I'd be looking to SELL USD/JPY for yet another day...
I'd be doing Retracement Trade after the release, for more information:
Henry's news trading methods.
The Market
With NFP forecasted at -75K, this ADP release may add to that negative sentiment and push JPY to new levels (retest the 85.00 on USDJPY, taking another shot at 14 year low levels) if we get a disappointing release. As a matter of fact, anything short of a stellar release, market will probably not be ready to steer away from the general weakness in the USD that we've seen in the past few weeks.
With USD trading weaker against all other majors, the general sentiment is dissociating USD's safe-haven status against its price action as market is both strong on JPY and weak on USD. The direction for USD in the next 30 days may be very well determined by the NFP release on Friday, making this ADP release a first relevant look into the future...
Additional Thoughts
The ADP NFP Employment Release is aways considered as a high impact release because ADP is the largest private payroll processing provider in the U.S., traders in general pay more attention to this release, especially during NFP week. ADP usually releases its version of Non-Farm Payroll numbers before the actual NFP based on it’s proprietary private payroll data.
If we are paying attention to the ADP release, we should of course pay attention at 7:30am on Challenger Job Cut report, which counts all major layoffs for the month of July. This number may be a bit higher as U.S. Census Bureau is expected to drop about 144K temporary workers, and that would be counted in this report. We may see some market reaction prior to this release...
And while we are on a roll, let's remember the Monster.com Employment Index on Thursday morning at 6:00am, which will give us another view of the upcoming NFP release on Friday.
Pre-news Consideration
ADP is expected to show a modest gain of 38K, but with Census hiring skewing the overall picture, private data such as the ADP may not move the market much... However, if we do get a strong release, we could expect some change in the pre-news expectation for NFP on Friday.
There should not be much pre-news trading opportunities for this release. General market trend is still for weaker USD. Best currency to go against USD is GBP. I'd expect to see the general market remain in its current trend prior to the release.
Historical Chart & Data Of ADP NFP Employment Report
Thanks,
8:15am NY Time US ADP NFP Change Forecast 38K Previous 13K
ACTION: USD/JPY BUY 90K SELL -10K
The Trade Plan
I usually don’t trade the ADP figure as I use this release for future market trend references, and I assume that most investors are likely to do the same, but if the deviation of 50K is actually hit, true speculators will probably have not problem jumping into the market, and this will undoubtedly change market perception on Friday’s NFP release; therefore it is best to be around your computer during the release time rather than finding out what happened hours later and perhaps missed the entire movement.
With the above being said, if we get 90K or better release, I'd be looking to BUY USD/JPY; if we get a -10K or worse, then I'd be looking to SELL USD/JPY for yet another day...
I'd be doing Retracement Trade after the release, for more information:
Henry's news trading methods.
The Market
With NFP forecasted at -75K, this ADP release may add to that negative sentiment and push JPY to new levels (retest the 85.00 on USDJPY, taking another shot at 14 year low levels) if we get a disappointing release. As a matter of fact, anything short of a stellar release, market will probably not be ready to steer away from the general weakness in the USD that we've seen in the past few weeks.
With USD trading weaker against all other majors, the general sentiment is dissociating USD's safe-haven status against its price action as market is both strong on JPY and weak on USD. The direction for USD in the next 30 days may be very well determined by the NFP release on Friday, making this ADP release a first relevant look into the future...
Additional Thoughts
The ADP NFP Employment Release is aways considered as a high impact release because ADP is the largest private payroll processing provider in the U.S., traders in general pay more attention to this release, especially during NFP week. ADP usually releases its version of Non-Farm Payroll numbers before the actual NFP based on it’s proprietary private payroll data.
If we are paying attention to the ADP release, we should of course pay attention at 7:30am on Challenger Job Cut report, which counts all major layoffs for the month of July. This number may be a bit higher as U.S. Census Bureau is expected to drop about 144K temporary workers, and that would be counted in this report. We may see some market reaction prior to this release...
And while we are on a roll, let's remember the Monster.com Employment Index on Thursday morning at 6:00am, which will give us another view of the upcoming NFP release on Friday.
Pre-news Consideration
ADP is expected to show a modest gain of 38K, but with Census hiring skewing the overall picture, private data such as the ADP may not move the market much... However, if we do get a strong release, we could expect some change in the pre-news expectation for NFP on Friday.
There should not be much pre-news trading opportunities for this release. General market trend is still for weaker USD. Best currency to go against USD is GBP. I'd expect to see the general market remain in its current trend prior to the release.
Historical Chart & Data Of ADP NFP Employment Report
Thanks,
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