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Forex Signal (Wed. October 6 2010, 8:15am NY Time EDT) - US ADP NFP Employment Change

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Oct 5, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    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 23K Previous -10K
    ACTION: 70K BUY USDJPY / -30K BUY EURUSD or GBPUSD

    The Trade Plan

    As stated in my previous analyses on ADP NFP news, I usually don’t trade it but I use this release for future trend reference. However, I assume that most traders 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 for 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 70K or better release, I’d be looking to BUY USD/JPY; if we get a -30K or worse, then I’d be looking to BUY EURUSD or GBPUSD... I'll look at my strength meter and find the strongest currency against the USD and.

    In the event that we do get our deviation, we'll be trading this news based on after-news Retracement Trading Method. For more information, read:
    Henry's Retracement Trading Method.

    The Market
    With NFP private jobs forecasted at +77K, or a slight increase from last month's figure of 67K, this ADP release's range is between +17K to +30K, which averages out at around 20K.

    With the current market focus on the Fed stimulus, this release may change the timing of it. If we get a significantly higher than expected release, expect to see some demand in the USD and traders should be expecting a better NFP release on Friday. If we get a worse than expected release, then
    the market may speculate that the Federal Reserve will move sooner than later with QE 2.

    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.

    I'll use caution when trading this release even if we get our deviation. When it comes to NFP, market always exaggerates.

    Pre-news Consideration
    There should not be much pre-news trading opportunities for this release.


    Historical Chart & Data For US ADP NFP

    Thanks,


    [​IMG]
     
    #1 Henry Liu, Oct 5, 2010
    Lasted edited by : Sep 8, 2016

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