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June 2, 2022

New NFP Trade Setups

Frank Cabibi

ADP data just came out today with some disappointing numbers, furthering our sentiment towards a less hawkish stance from the Fed with a focus on economic expansion. Here are some new NFP trade setups for tomorrow's news.

Revised NFP Sentiment

Employment is predicted to be somewhere between 295-325K new jobs added. Analysts expected 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.

Additionally, economists expected an increase of 295,000 jobs from today's ADP, but saw less than half that amount this morning. This is highly concerning for the job market and economic growth. So, the Fed might switch up their stance a bit and focus on growth which would be bullish for risk-on pairs.

NFP Trade Setups

GBP/USD

nfp trade setups

Investors could be looking for a close above the 1.26000s for a clean sign of a breakout on the 4H. Yesterday's sell off resulted in a big demand zone which then led to several green candles in response. Price did touch higher than the resistance zone, but it couldn't close above. In order to see a test at the 1.29000s, price will need to do so before then.

Gold

Gold also seems to be bullish at the start of the New York session. The miss in ADP numbers is helping the metal gain a foothold over the dollar as price climbs 1%. Gold’s price is testing resistance in the $1860s and coming up to the 200 simple moving average on the 4H chart. The combination of a break in this level and a miss in NFP tomorrow could mean a test at the $1890s.

SPX500

SPX500 dipped under a supportive trend line before veering back up past support. This false breakout to the downside suggests that price could be looking to test resistance around $4200. A hard rejection from the lows may be due to the anticipation of a miss in NFP, however, volatile market swings could be in store for the index for the next few days. Right now, technicals point toward a push higher at $4200.

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