– U.S. Non-Farm Payrolls to Climb 120K, Unemployment Rate to Rise to 7.3%
– NFP Missed Market Forecast for the Last Three Prints
Trading the News: U.S. Non-Farm Payrolls
U.S. Non-Farm Payrolls are projected to increase a lackluster 120K in October, and marked slowdown in job growth may dampen the appeal of the greenback as the Federal Reserve retains a cautious outlook for the world’s largest economy.
What’s Expected:
Time of release: 11/08/2013 13:30 GMT, 8:30 EST
Primary Pair Impact: EURUSD
Expected: 120K
Previous: 148K
DailyFX Forecast: 100K to 160K
Why Is This Event Important:
Given the Fed’s forward-guidance for monetary policy, a dismal employment report may encourage the central bank to further delay its exit strategy, and the board may forego the taper-timeline laid out by Chairman Ben Bernanke in order to promote a stronger recovery.
Expectations: Bearish Argument/Scenario
Release
Expected
Actual
Personal Consumption (3Q A)
1.6%
1.5%
ADP Employment Change (OCT)
150K
130K
Advance Retail Sales (MoM) (SEP)
0.0%
-0.1%
The ongoing slack in the real economy along with the recent slowdown in household spending may weigh on hiring, and a dismal print may halt the near-term rally in the dollar as it dampens the outlook for growth.
Risk: Bullish Argument/Scenario
Release
Expected
Actual
Gross Domestic Product (Annualized) (3Q A)
2.0%
2.8%
ISM Non-Manufacturing (OCT)
54.0
55.4
ISM Manufacturing (OCT)
55.0
56.4
Nevertheless, the uptick in the growth rate paired with the pickup in business outputs may generate a strong NFP figure, and a positive development should prompt a more meaningful rally in the greenback as it renews bets for a taper at the Fed’s December 17-18 meeting.
How To Trade This Event Risk(Video)
Join DailyFX on Demand for Full Coverage of U.S. Non-Farm Payrolls
Bearish USD Trade: NFP Prints 120K or Lower
Need to see green, five-minute candle following the print to consider a long trade on EURUSD
If market reaction favors a short dollar trade, buy EURUSD with two separate position
Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
Shift stop to entry on remaining position once initial target is hit, set reasonable limit
Bullish USD Trade: Job Growth Exceeds Market Forecast
Need green, five-minute candle to favor a long EURUSD trade
Implement same setup as the bearish euro trade, just in reverse
Potential Price Targets For The Release
EURUSD Daily
Chart – Created Using FXCM Marketscope 2.0
Bullish Trend Gives Out; Carving Head-and-Shoulders Top?
Relative Strength Index Slips Below Support (37)
Interim Resistance: 1.3530-40 (61.8 retracement)
Interim Support: 1.3270 (23.6 expansion) to 1.3300 Pivot
Impact that the U.S. Non-Farm Payrolls report has had on USD during the last month
Period
Data Released
Estimate
Actual
Pips Change
(1 Hour post event )
Pips Change
(End of Day post event)
SEP 2013
10/22/2013 12:30 GMT
180K
148K
+67
+106
September 2013 U.S. Non-Farm Payrolls
Employment increased another 148K following the 193K advance in August, while the jobless rate unexpectedly narrowed to 7.2% from 7.3% as discouraged workers continued to leave the labor force. The dollar took a hit following the weaker-than-expected print, with the EURUSD climbing above the 1.3700 handle, and the greenback continued to weaken throughout the day as the pair closed at 1.3780.
— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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Source: Daily fx
