Forex Signal (Friday September 2, 2011 – 8:30am EDT) – US Non-Farm Employment Change

[Stavro D'Amore]

Hello All,

Today we have US Non-Farm Employment Change and US Unemployment numbers due to arrive, p[lease be mindful of the bellow trade plan and be diligent with your trading .

US Non- Farm Employment Change
Forecast 75k
Previous 117K
Pair to trade: USD/JPY and EUR/USD

Numbers we need:
BUY USD/JPY 150K
BUY EUR/USD 10K

Economical Impact: High
Typical Result: Good for Currency
Occurrence: monthly, usually on the first Friday after the month ends
Spike Probability: Good, we can see 40 pips on initial spike

About our Triggers:
US Non- Farm Employment Change forecasted to arrive at 75k
We are looking for a deviation of 75K to the upside to BUY USD/JPY and a deviation of 65K to the downside to BUY EUR/USD
So the summary is we get 150 or better I will look to enter a LONG position on USD/JPY and if we get
10K or lower I will go LONG on EUR/USD.
Should this report be triggered, we can expect to see about 40 pips on the initial spike.
This trade will have a good chance of a 30% retrace on the initial spike so i recommend trading the retracement method as stated bellow.

NOTE: We a conflict of US Unemployment numbers that is due to arrive the same time, This is forecasted at 9.1% and is expected to come at 9.1%. Please also note that monthly changes and the revisions in payrolls can be quite volatile.

What is it? And why does the market care?
The Non-Farm Employment Change measures the number of employed people during the last month of all non-farming businesses. The total non-farm Employment accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States.
It is the single most important piece of data contained in the employment report, which considered offering the best overview of the economy.

A higher than expected reading should be taken as positive/bullish for the USD,
A lower than expected reading should be taken as negative/bearish for the USD.

Method I use to trade this:
Stavro D’Amore Trading Method

There is NO pre news for this release, as there is a good chance of a USD sell off, I still believe that pairs such as EUR/USD may have further downslides due to EU current situation.

I do recommend spike trading as an option. Liquidity is very good at the moment if you are using an ECN broker. Please use no more than a 15 pip limit order to control slippage.

I will look for a 30% retracement in the original spike before entering. I will be looking at a 5 minute chart. I will sell half my position as soon as I hit the original high point of the first initial spike and place a SL at the original spike price.

My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame to analyze this.

Historical Chart and Data for US Non-Farm Employment Change

All the best

Stavro D’Amore

 

[nadanadya]

correction

Hi,
What do you mean by ECN broker
Thanks

 

[Sivamayam]

Dear nadanadya,

ECN are brokers whom their liquidity will be provided by Big banks and other fib\nancial instituions.They take thier benefit by charging comisssions not thru spreads as market makers.The noraml commision is 20usd per 1 lot.Hope this will help you.Any clarification conatct YM sham_raj_octo

 

[Stavro D'Amore]

ECN broker means Electronic Communication Network, its a better market than a market maker has liquidity is deeper and there is a good chance you will get a better fill than a bucket shop broker.

Regards

Stavro D'Amore

 

[yousuf]

hey

hi steve, hope your well,,

wow, that was a bad reaction from the market after dissappointing figures wasnt it? made 5 pips lol,

althought i thought could easily make 50.

what do u think happened?

 

[dkami]

Hi Stavro I have a question if you would be so kind to answer

I live in Australia and on the 4.30pm news Wespac(which is a bank in Australia) said that they only expect 10k for the NFP they said this 6hrs before NFP release

So my question is can you tell me where they could have got this 10k figure from?

 

[Boko Maru]

Hi Stavro I have a question if you would be so kind to answer

I live in Australia and on the 4.30pm news Wespac(which is a bank in Australia) said that they only expect 10k for the NFP they said this 6hrs before NFP release

So my question is can you tell me where they could have got this 10k figure from?

Stavro can answer of course, but I'll chime in myself if that's ok.

There were 86 economist/bank estimates gathered by Bloomberg. There was a wide range of estimates for what NFP would be, from -20K to +160K. The average of all the estimates was +68K. This bank in Australia you mentioned projecting 10K was probably just one of those 86 estimates. So where they got that number was probably their in house economist making his best prediction from whatever research he did. The consensus number of 68K was simply the average of those 86 estimates.

That's how I understand it at least...hope that helps.

 

[dkami]

Stavro can answer of course, but I'll chime in myself if that's ok.

There were 86 economist/bank estimates gathered by Bloomberg. There was a wide range of estimates for what NFP would be, from -20K to +160K. The average of all the estimates was +68K. This bank in Australia you mentioned projecting 10K was probably just one of those 86 estimates. So where they got that number was probably their in house economist making his best prediction from whatever research he did. The consensus number of 68K was simply the average of those 86 estimates.

That's how I understand it at least...hope that helps.

O ok thanks Boko Maru now i can understand why the realises can be so far out

I also got an email 15min before the release saying that Goldman Sachs are revising lower there forecast to +25k from +50k previously is there any site you can use to get all the forecasts and revisions from the different economists/banks?

 

[Boko Maru]

Hey dkami...sent you a PM.

 

[dkami]

Hey dkami...sent you a PM.

Thanks much appreciated