A1 Trading Company

Ticker tape by TradingView

October 6, 2022

Warning: NFP is Nearly Here

Michael J. Donoghue
Warning: NFP is Nearly Here

Tomorrow morning at 8:30 am Eastern Time, the United States Bureau of Labor Statistics will release three key monthly labor data reports: Average Hourly Earnings (month-over-month), Non-Farm Employment Change/Payrolls (NFP), and the new US unemployment rate. These three measures of nationwide labor market activity, and NFP in particular, have tremendous market-moving potential as fundamental catalysts. This likelihood of volatility across financial markets warrants a warning: NFP is nearly here.

Currently, markets are forecasting an 0.3% increase in average hourly earnings in September (which equates to higher costs for businesses and more money for employees), 248,000 new non-farm payrolls added to the US economy, and an unemployment rate of 3.7%, unchanged from August. If the real numbers exceed these expectations on Friday, this will likely be bullish news for the US Dollar, since the Fed will have further incentive to raise rates to cool the economy. However, if the real numbers fail to meet these expectations, this may be interpreted as bearish for USD, since it could prompt the Fed to consider pumping the brakes on further interest rate hikes. If Wednesday's NFP estimates are any indication, a hotter-than-expected US labor market seems plausible, which would benefit USD bulls.

Two Potential Pairs to Buy

The following pairs are rated favorably by the A1 EdgeFinder as potential buying opportunities for those aiming to go long on USD. They are listed below with their respective ratings and signals, along with their EdgeFinder analysis and current trends on a 1-day timeframe.

1) USD/JPY (Earns a 4, or ‘Buy’ Signal)

Warning: NFP is Nearly Here
Warning: NFP is Nearly Here

2) USD/CHF (Earns a 4, or ‘Buy’ Signal)

Warning: NFP is Nearly Here
Warning: NFP is Nearly Here

Two Potential Pairs to Sell

The following pairs are rated favorably by the A1 EdgeFinder as potential selling opportunities for those who are bullish on USD. They are listed below with their respective ratings and signals, along with their EdgeFinder analysis and current trends on a 1-day timeframe.

1) EUR/USD (Earns a -7, or ‘Strong Sell’ Signal)

Warning: NFP is Nearly Here
Warning: NFP is Nearly Here

2) GBP/USD (Earns a -5, or ‘Sell’ Signal)

Warning: NFP is Nearly Here
Warning: NFP is Nearly Here

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