A1 Trading Company

Ticker tape by TradingView

May 31, 2022

How To Trade NFP Before The News

Frank Cabibi

The dollar is seeing some demand growth today as investors anticipate the upcoming Non-Farm Employment data. The DXY and USD pairs are on track to end the day in the green for the first time in four trading sessions. Here are some things you can do to prepare for this along with trade setups to take now in the wake of NFP.

NFP Forecasts & What To Expect

nfp
https://www.forexfactory.com/calendar#detail=122942

Based on the mixed forecasts between ADP and and Friday's release projections, employment is predicted to be somewhere between 295-325K new jobs added. Either way, analysts expect that jobs added will land somewhere less than last month's actual. This could push for a less aggressive stance by the Fed, although they were very clear about multiple 50 bp hikes in this year alone.

However, the Fed has been open to change their minds every now and then. Powell originally talked about raising rates by 25 basis points before inflation got worse than they expected. So, the Fed might just be taking extreme measures to cap inflation until circumstances call for another approach. In this case, less jobs added this month might prompt them to loosen up on policy.

What The Dollar Might Do

Throughout the week, we might see a stronger dollar in anticipation of NFP and unemployment rate. This is because the Fed's stance is currently on track to hit over 4% interest by the end of this year. And if policy stays the course, we could see a much stronger USD going forward. Investors might be pricing that in right now, so long setups might be opportunistic up until NFP.

USD Setups Before NFP

USD/JPY

nfp

There is already some bullish momentum on the UJ pair after price broke out of a wedge/flag pattern on the 1D timeframe. If price holds above the falling trend line, a move higher to 131.200s would seem likely. Additional support lies below in the 123.8-125 zone.

USD/CHF

nfp

USDCHF nears support at the 61% fib level and has support under that at 0.94619. The pair saw a huge sell off in the last couple weeks while risk-on pairs got to rebound. Price still has a little ways to go before it hits support, so it might continue to fall until that level is hit.

Setups Post-NFP

USD/MXN

The downtrend on this pair has continued regardless of the tight monetary policy on the USD versus the shaky value of the Mexican peso. If NFP beats, investors might start clinging to the USD which would drive price up to resistance and the falling trend line around 20.1000s. However, if NFP misses, policy makers might be pressured to weaken their stance and cause risk on sentiment in the market. If that is the case, UM could sink lower and keep the downtrend going while paying high swaps.

A1 Edgefinder

Smart Money Tracker
See where big money is flowing with the A1 Edgefinder's smart money tracker! With one click, see where the biggest money flows are entering and exiting through COT data.

10% off code: 'READER'

GET ACCESS NOW

VIP discord

Trade Alerts, Strategies, Chatrooms & more!

10% off code: 'READER'

LEARN MORE
What To Expect From Today's FOMC

Today at 2:00 pm EST, the Fed will announce their latest interest rate decision. Estimates suggest a smaller hike of 25 basis points this time around. Here are some things to consider before the FOMC decision later today: The Fed has struggled to tighten their grip on inflation without causing too much disturbance in the […]

Read More
The Art of Not Trading

With the holiday season lingering on and a new year on the cusp of arrival, traders may glance at the calendar and notice there is not much economic news to anticipate on Friday to cap off a light week. In situations like these where there can be lulls in bullish and bearish momentum due to […]

Read More
Best Currency to Buy?

As the fiscal year comes to a close, consumers will likely finish shopping for the holidays, and traders and investors will get some respite thanks to a long weekend due to bank holidays around the world. While concerns about further stock market selloffs may be lingering in the minds of some, a promising set of […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram