Trading September 09 NFP Release

The NFP data (non-farm payroll) gets released on the first Friday of each month at 08.30 New York time. This is currently EDT (Eastern Daylight Time), which equals GMT-4. Info on NFP.

The NFP data release can move the USD +/-100 pips in a few seconds. I wrote an abstract before with a suggestion how to trade the release (Link). The main recommendation is to wait at least 30 minutes after the release before entering a trade. The initial reaction often goes into the opposite direction compared to the price development for the rest of the day.

Today there are 2 major factors to consider, when entering trades

• NFP Results
• Dow Jones Opening Trend

Currently the USD price action is mainly driven by “risk/ risk aversion”. Indications for a better economy lead investors to taking on more risks. Therefore commodity currencies (impacted stronger by economic growth) like AUD and CAD rise on good economic news and the USD falls. If the indicators provide a negative signal on the economy, the “safe haven” currencies USD and JPY are most likely to rise.

NFP Results
A Reuters survey of experts expects a change in the September NFPs of -180,000 (compared to the -216,000 in August). Goldman Sachs however recently revised their estimate from -200,000 to -250,000. If the NFP results indicate a stronger economy (e.g. 150,00 or less jobs lost) the USD will most likely fall vs EUR, CAD and AUD.

If results are 250,000 or larger indicating the economy is worse than expected then USD will most likely rise vs EUR, CAD and AUD.


Dow Jones Opening Trend
The US stock market opens at 09.30 NY time, one hour after the NFP release. Yesterday the Dow was down 203 point / 2.09%. If the downtrend continues, the risk aversion will most likely drive up the USD further. This effect might start before the opening at Wall Street as futures get traded earlier and give an indication on the opening direction.