[UPDATE] This week’s data is pointing to an inline or better than expected NFP release today. According to both ISM Manufacturing and Non-Manufacturing PMIs, which came in at 55.7 v 54.00 and 58.6 v 55.0 respectively, have shown strong and sustainable gains that not only are positive for the Nonfarm Payroll, but also positive for long-term growth, a factor that the Federal Reserve considers in its monetary policy. The Employment Sub-index of these PMIs are also positive, with Non-Manufacturing Employment Index is at 57, which beat prior release of 53.2. Considering that the service sector is above 80% of the economy, this 57 figure definitely adds confirmation to a strong NFP release on Friday. In addition, the ADP NFP report on Thursday met forecast at 176K v 175K, an indication that we won’t get a surprisingly low Nonfarm Payroll report today. When considering last month’s NFP release, which came in worse than expectation at 162K, one cannot help to wonder the close correlation between the Employment Sub-index of the ISM Non-Manufacturing PMI and the BLS release, therefore I believe the probability for a better than expected release is due today. Furthermore, thursday’s Initial Jobless Claims figure was 323K v 330K, and the 4-Week Average claims now sits at 328.5K, or the lowest since October of 2007. There is a possibility that if we get a strong NFP release today, the percetange of Unemployment rate would drop by another 0.1% to 7.3%, and that would be a very bullish case for the USD. Here are a few general scenarios to consider with tomorrow’s NFP: ** Nonfarm Payroll Greater Than 220K: I’d be looking to go LONG on USD, perhaps SELL EURUSD or BUY USDJPY as speculators position for an imminent Fed taper during the upcoming meeting this month. ** Nonfarm Payroll Less Than 100K: I’d be looking to SELL USD but also looking at risk currencies such as AUD, GBP, etc… as those currencies may benefit more in a risk appetite + weak USD environment. ** Unemployment Rate 7.3% Or Less: This single figure will probably solidify Fed Tapering in September. I would go LONG on USDJPY or SELL EURUSD immediately. I don’t think the market needs more than that. At any rate, use caution in your trading and if there is any trade that retracement trading method is meant for, it would be the Nonfarm Payroll.
Posted on: Fri, 06 Sep 2013 09:55:12 +0000
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