Trade ideas for August 2-6
What events to follow and how to trade during the week of July 2-6?
Hooray! It’s NFP day!
Instruments to trade: EUR/USD, USD/JPY, GBP/USD
The US NFP report will come out on January 8 at 15:30 MT time. Keep this time free, otherwise, you risk missing the crucial event for the whole Forex world that occurs only once in a month! Let us quickly remind you of what it is and how the market usually reacts. NFP or non-farm payrolls represent the change in the number of employed people during the previous month, excluding those who work in the farming industry. The more people are employed, the better the economic conditions are. In contrast, the fewer people are employed, the worse the economic conditions are. Easy! However, the market reaction depends on whether the actual NFP is better than the forecast or not. Elsewhere, it’s important to pay attention to two other indicators released at the same time with NFP: average hourly earnings m/m and the unemployment rate.
- If all the three indicators come out better than the forecasts, the USD will rise.
- If all the indicators are worse than the forecasts, the USD will drop.
- If NFP comes better, but earnings – worse, the USD will spike at first, but it will fall with the second wave.
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