The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
NFP will be out on May 7!
What will happen?
One of the most significant economic indicators for the US dollar will come out on Friday at 15:30 MT (GMT+3) - NFP. Non-farm employment change represents 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 it is for the economy! Therefore, NFP serves as a base for the future rate decision by the Federal Reserve. The high level of the indicator increases the possibility of rate hikes in the future, which will push the USD upward. On the other hand, the decline in the NFP figures raises concerns about the economic slowdown and reduces the number of projected rate hikes by the Fed.
How to trade on Non-Farm Payrolls?
Pay attention that NFP is published together with the levels of monthly average hourly earnings and unemployment rate. So, there are three indicators to follow. Compare the actual numbers with the market expectations and follow the rule below. Besides, check out our special trading strategy for trading on NFP.
- If all 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.
Instruments to trade: EUR/USD, GBP/USD, USD/JPY
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
2022 was rough: inflation, energy crisis, and plenty of other controversial situations…