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United States Non-Farm Employment Change April 1 2022

JamesThatcher

Well-known member
United States Non-Farm Employment Change April 1 2022.png

What does the data mean to the market?

The headline data of Non-Farm Payrolls (NFP) reflects the change in the number of people employed during the previous month. A higher number of people employed is good for the US economy and would create a buying opportunity on the USD. Vice versa, a lower number would be bad for the US and would generate a sell on the USD.

NFP comes out with six lines of data which makes this report far more complex. The other two significant lines of data I watch are the Unemployment Rate and Average Earnings.

The Unemployment Rate, a lower number, is good for the USD and vice versa. Whereas Average Earning a higher number is better for the US economy and vice versa.

All three lines must deviate in the same direction. I will not tolerate a conflict from either UR and AE.


Historic deviations and their outcome

September 3 2021 Today I saw a massive deviation of -515k on the headline Non-farm Payrolls with Unemployment Rate coming out as expected. We saw a decent 20 pip move with continuation after that for the next few minutes. Noticeably GBPUSD worked better on this report.

Check out the price action here:

August 6 2021 A small 74 deviation actually created a nice move but mainly because UE helped with a 0.3 deviation.

Check out the price action here:

July 2 2021 A decent size 130 deviation gave an excellent spike, but with a 0.3 conflict from Unemployment Rate, we soon saw the move being snuffed out, seeing a severe retrace, just as expected. But, again, this shows the importance of looking at all lines of data.


Check out the price action here:




I will use forecasts of:

Average Hourly Earnings (M/M) 0.40
Change in NonFarm Payrolls 480,000
US Average Hourly Earnings (Y/Y) 5.5



Today's trade plan

I will be focusing on Average Earnings Y/Y and want this to deviate by at least +/- 0.2% with supporting deviation from the headline NFP to deviate by at least 75k.

I will not tolerate conflicts from Average Earnings M/M

I will ignore all other lines.

This one can get volatile immediately after the data is released while the market digests the numbers. Hold onto your hats. This one is not for the fainthearted.


Tradable pairs

EURUSD
GBPUSD
USDJPY


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
 
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