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Currency Trading Euro Dollar – Non Farm Payroll Today

Today of course is all about the Non Farm Payroll figures which will dominate the markets, whether you are trading currency, stocks, commodities, bonds or futures. Rightly or wrongly these are the figures that create volatility in the market, and are eagerly anticipated by all the market players, and today will be no different. The figures are released monthly, usually on the first Friday of the new month, and the data measures, amongst other things, the change in the number of employed people during the previous month. These are the “raw” numbers which are expected to be bad again, with a forecast of -530,000 against a previous of -524,000, which if correct, would be the third time in a row that the numbers have come in at over 0.5 million jobs lost.

These are the numbers that the markets react to initially, but behind these figures are a whole raft of statistics and data which is then analyzed and dissected, which is why the market initially moves one way on the initial data, and then promptly reverses as the statistics are analysed, which is the way I always trade the news. In other words, wait for the market to settle, and then take an opposite position to the initial market move – I’m sure others do the same, but it’s a strategy and in many ways a bet – as long as you have a sensible stop loss in place, then you either win, or lose! If the actual beats the forecast then this is generally good for the home currency, but as today’s figures are likely to be bad, it is anyones guess. My only word of caution is that the pre-released ADP figures on Wednesday, did come in slightly better then expected, and these often provide a good benchmark for the NFP data!