– U.S. Non-Farm Payrolls to Climb 180K, Unemployment Rate to Hold at 7.3%
– Labor Force Participation Slipped to 63.2% from 63.4% in July (Lowest Since 1978)
Trading the News: U.S. Non-Farm Payrolls
With U.S. Non-Farm Payrolls expected to increase another 180K in September, a pickup in job growth may fuel a more meaningful rebound in the dollar as it highlights an improved outlook for the world’s largest economy.
What’s Expected:
Time of release: 10/22/2013 12:30 GMT, 8:30 EDT
Primary Pair Impact: EURUSD
Expected: 180K
Previous: 169K
DailyFX Forecast: 160K to 200K
Why Is This Event Important:
Indeed, an upbeat employment report may heighten the appeal of the dollar as the Fed largely retains the taper timeline laid out by Chairman Ben Bernanke, but we may see the FOMC further delay its exit strategy should the data highlight a slowing recovery.
Expectations: Bullish Argument/Scenario
Release
Expected
Actual
Consumer Credit (AUG)
$12.000B
$13.625B
Personal Spending (AUG)
0.3%
0.3%
Durable Goods Orders (AUG)
-0.2%
0.1%
The resilience in private consumption along with the ongoing expansion in consumer credit may help to boost hiring, and a positive development may spark a bullish reaction in the dollar as it raises the outlook for growth.
Risk: Bearish Argument/Scenario
Release
Expected
Actual
ISM Non-Manufacturing (Employment) (SEP)
—
52.7
Challenger Job Cuts (YoY) (SEP)
—
19.1%
ADP Employment Change (SEP)
180K
166K
Nevertheless, the persistent slack in the real economy may weigh on the labor market, and we may see the Fed carry its highly accommodative policy stance into the following year in an effort to encourage a stronger recovery.
How To Trade This Event Risk(Video)
Join DailyFX on Demand for Full Coverage of U.S. Non-Farm Payrolls
Bullish USD Trade: NFPs Rise 180K or More; Unemployment Rate Holds Steady
Need to see red, five-minute candle following the print to consider a short trade on EURUSD
If market reaction favors a sell trade, short EURUSD with two separate position
Set stop at the near-by swing high/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
Bearish USD Trade: Employment Report Misses Market Expectations
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
Maintains Bullish Channel From July; Bearish RSI Divergence?
Interim Resistance: 1.3740 (61.8% expansion) to 1.3760 (1.618% expansion)
Interim Support: 1.3450 (50.0% expansion) to 1.3490 (50.0% retracement)
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)
AUG 2013
09/06/2013 12:30 GMT
180K
169K
+33
+65
August 2013 U.S. Non-Farm Payrolls
The U.S. economy added another 169K jobs in August, with the jobless rate narrowing to 7.3% from 7.4% the month prior, but the drop in unemployment was largely due to discouraged workers leaving the labor force as the participation rate slipped to 63.2% from 63.4% during the same period. The dollar struggled to hold its ground following the dismal results, with the EURUSD climbing above the 1.3150 region, and the greenback continued to track lower during the North American trade as the pair closed at 1.3175.
— 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
