NFP Trading Update

April 2, 2020

Another Solid Week

It’s been another solid week for myself & my team; finished up today with +230 pips on GBPAUD & a breakeven trade on NZDCAD. Friday trading will be limited because of the US Non-farm Payroll report which is likely to shake up the markets heavily. I’m expecting the Dollar to make some wild moves so let’s take a look at the possibilities for tomorrow.

A Dramatic Change In Employment

Due to the current coronavirus crisis, global economies are seeing a lot of weakness & uncertainty. on the week starting 21st March, US markets saw the biggest initial jobless claim ever with a record count of 3.2 million. To put into perspective how dramatic of a jump this is here’s a chart showing historic initial jobless claims:

Jobless claims virus

The jobless report initially caused a sell of for the US Dollar but losses were regained when USD rallied off of current economic stimulus orders.

Economic Stimulus

The US is combatting the economic effects of the coronavirus with a range of different fiscal stimulus plans. They are performing quantitative easing (introducing new money supply into the economy) and asset purchasing; buying up bonds & equities in any amount needed to support the financial markets, as well as a range of other stimulus measures. US fiscal plans are working in favour for the meantime propping up the USD against many other currencies. I personally think the stimulus plans will continue to push strength for USD so here’s what I expect for the NFP tomorrow.

NFP Report Prediction (3/04/2020)

The NFP counts the amount of new jobs formed within a given month in the US. Given the record jump in unemployment I’m expecting the report to be negative which will present a huge drop from the current average readings and potentially form a new record low for the NFP as a whole. A negative report would theoretically see the US Dollar sell off dramatically in the short term through the aftermath of the news.

I don’t expect a sell off to last long term though – chances are we will rebound through next week’s session and the dollar will continue its run to the upside; thanks to quantitative easing & other fiscal stimulus measures.

So in Short – Sell the news & then buy the recovery.

What To Do

Just because I expect the Dollar to fall through the news doesn’t mean I’ll be selling it. With news like the NFP we have to be cautious of spread manipulation & wild movements making it likely that stop losses would be hit if we try to trade it. What I personally like to do is trade safe – protecting your account is priority number one – I prefer to take the missed opportunity through the actual news and then trade off the back of the outcome. In this instance we could see the sell off provide some excellent buying opportunities for USD against other currencies.

I will be taking Friday & the Weekend out of the field; no more trading for me as it’s time to backtest, refine & study the charts deeper, and prepare for a fresh trading week on Monday. It’s just as important to put the time in to studying & perfecting your craft as it is to be in the field trying to make money 24/7.

I’ll be putting together some educational content for my private team tomorrow and prepping our winning trades for the week to come. Get involved with the team at a low price right now & start improving your trading career.

Stay safe through the NFP & enjoy your weekend – we will be back on Monday to smash the markets once again!

Leave a Comment