ForexSource

US Dollar Looses Ground After Weak Non Farm Payroll Report

forexsource — Tue, 10 Feb 2009 21:51:22 +0000

US Labor Department announced that US economy lost 598,000 jobs in January. The December was revised lower to a 577,000 loss. The unemployment rate climbed to 7.6 percent, setting a 16-year high for this figure. The figure on the left summarizes the biggest monthly falls in NFP for the past year.

”These employment numbers are dreadful, but does it matter?” said Alan Ruskin, senior analyst at RBS’s global banking and markets division. “Not for the market today. All the prior labour market indicators, notably the claims data, gave a feeling of foreboding before these numbers. The data broadly delivered.”
US Dollar lost ground against euro and pound. Further declines in the USD are expected to continue in the week to come. Although the EUR/USD is in a downtrend, weak report from the US allowed euro to pullback to the 1.3000 level.

EUR/USD Hovering around 1.2700 Level

forexsource — Mon, 02 Feb 2009 04:13:01 +0000

As seen in the chart below EUR/USD is currently trading at 1.2730, 30 pips above the 1.2700 level. Euro is making a steady decent in the last couple of days reaching early December lows. If the 1.2700 support is broken and stops will be tripped we should see a small rally leading to a further decline. One of the fundumental reasons for euro’s weakness is the PPI report which will come out on Tuesday. It is expected to show that European producer prices slid for a fifth month, giving the ECB central bank another reason to cut interest rates.

Today’s Strategy Sell rally off the 1.2700 level, place a stop at 1.2740 and a limit at 1.2622. (Results will be posted in the comments section after the trade is closed)

EUR/USD February 01, 2009 Chart

CAD Employment Figures Boost The Loonie

forexsource — Sun, 09 Dec 2007 04:08:17 +0000

The Canadian dollar rose sharply against USD after the employment figures came well above forecasts. Statistics Canada reported that in the month of November Canadian economy added 43,000 jobs versus 8K which was expected by economists. The Canadian dollar gained more than 100 pips in the first minutes after the report as seen in the 5-min chart below. It stalled at the 1.0004 mark before pulling back. CAD lost some ground as both oil and gold drifted lower during the trading day, closing at 88.28 (-1.95) and at 800.200 (-6.900) respectively.
There wasn’t much reaction in the USD after the US Nonfarm Payroll report which was slightly higher than expected 93K jobs added vs 75K expected. It stayed within its recent trading range against CAD and other majors. Strong US data decreased the likelyhood of a 50bp rate cut dunring its upcoming FOMC meeting on December 11th.

Today’s Strategy: USD/CAD is bounded by two major levels: 1.0215 resistance and 0.9935 support. Long term charts show the overall uptrend in the pair. This week’s strategy - buying on bounce of 0.9935 with a 30 pip stop or buy on break through 1.0215 with 30 pip stop.

US Jobs Surged in October

forexsource — Fri, 02 Nov 2007 19:00:44 +0000

Today’s non farm payroll report by Bureau of Labor Statistics showed an increase in employment in October. 166,000 new jobs were added vs 85,000 jobs estimated by economists polled by Thomson’s IFR Markets. Job gains occurred in professional and business services, health care, and leisure and hospitality sectors. The number of manufacturing jobs continued to decline, and employment in the construction sector was little changed.

Strong employment data show US economy is resilient and is on its way to recovery from troubles in the housing and financial sectors. The positive news gave strength to the USD in the first minutes after the report. However its strength was overrun by bullish sentiment in the EUR/USD pair. After touching the 1.4447 level the pair rose sharply to 1.4520. Euro strength is primarily based on a possible rate hike by the ECB by year end. Next week’s ECB meeting (November 8th) will be critical for the euro. If the the central bank decides to raise the interest rate EUR/USD will climb to new highs, however if the hike will not occur there can b
at 1.4400.

EUR/USD 12:30 GMT 2007- non-farm payroll October release

Dollar strenghtens on NFP and ISM Manufacturing data

forexsource — Fri, 01 Jun 2007 16:02:39 +0000

The U.S. currency advanced on reports showing an increase in both employment and manufacturing, which are likely to reduce the probability of a cut in borrowing costs by the Federal Reserve later this year. The Fed said in minutes of its May 9 meeting released this week that it still expects a pickup in the economy this year and views inflation as its main concern.
Friday morning at 08:30 the Department of Labor released its closely watched non farm payroll in the month of May, showing that job growth which was above economists expectations.

Non-farm payroll employment increased by 157,000 (vs. 135,000 as the expected number) jobs in May following a downwardly revised increase of 80,000 (vs. previously reported 88,000) jobs in April.

The Labor Department also said that the unemployment rate remained unchanged at 4.5 percent, as economists had expected. The Institute for Supply Management’s index of U.S. factory activity edged up to 55.0 from 54.7 in April.
Strong manufacturing data helped dollar reach a seven week high vs euro at 1.3391.

Today’s Strategy: After a volatile NFP release the market consolidated into a triangle pattern waiting for the ISM Manufacturing. Place a straddle, anticipating breakout from consolidation - BUY order @ 1.3431, SELL order @ 1.3422, with a 10 pip hard stop and 20 pip limit.

Dollar weakens after the Non-farm Payroll release

forexsource — Fri, 04 May 2007 16:53:13 +0000

Employers in the non-farm sector added 88k jobs in April, the Labor Department reported today.The data came below expectations of 100k and being the lowest since Nov 04. Last month’s data were revised lower down from 180k to 177k. More importantly, Feb’s job growth was also revised down from 113k to 90k. Unemployment rate rose back from 4.4% to 4.5%. Average earnings slow to 0.2% mom, 3.7% increase. This report is ideal from the Fed’s perspective of keeping policy on hold despite concerns that inflation may not moderate. It is consistent with moderate economic growth and a slight easing in labor market pressures. The dollar fell 0.27 percent to $1.3587 per euro at 11:07 a.m. in New York. It touched a record low of $1.3681 on April 27. Further weakening of the dollar is expected in the weeks ahead.

Today’s Strategy: As seen in the chart below, the market reacted to the NFP news at 08:30 by pushing the EUR/USD to 1.3586. The pair quickly retraced to 1.3554 providing an excellent entry opportunity. BUY 2 lots EUR/USD at 1.3554 stop 1.3534, 1st profit target 1.3610, 2nd 1.3630.

Non-farm Payroll and GBP/USD

forexsource — Fri, 06 Apr 2007 16:16:34 +0000

Non-farm payroll increased by 180K in March after a 113K gain in February. (revised from 97K). Economists had forecast a number close to 134K. Just after the release dollar started strengthening across the board , since positive NFP numbers might delay the much anticipated interest rate cut by the Federal Reserve.
However, stengthening of the dollar after the news release was somewhat limited. As far as the GBP/USD is conserned 1.9634 (61.8% fibonacci retracement Jan high, March low) proven to be a good support level. BOE did not raise rates yesterday, likelyhood of a hike at the next BOE meeting (May 10th,2007) is high, therefore the pound should strengthen
in the weeks to come, since even strong NFP reverse its bullish trend.

Today’s Strategy: Long GBP/USD at 1.9647 with a STOP at 1.9613 and Target profit at 1.9700 and 1.9742

Dollar Rises on Positive Non-farm Payroll numbers

forexsource — Fri, 09 Mar 2007 17:04:44 +0000

The dollar rallied after the Labor Department reported an increase of 97,000 jobs in the non-farm sector in February. The numbers was in line with the general forecasts, however it was much higher than what many large investment banks expected. The report released for the previous month was revised from 111,000 jobs to 146,000 jobs. The unemployment rate eased to the December 2006 level of 4.5% down from 4.6% in January. Steady economic pace decreased the likelyhood of a rate cut by the Federal Reserve during its meeting on March 20-21.
The Department of Commerce reported that the US trade deficit narrowed more than expected to $59.1 billion in January as U.S. exports increased to an all-time high.

Positive employment numbers coupled with a drop in the trade deficit eased the U.S. sell-off providing support for the dollar. As seen in the EUR/USD chart below the euro dropped from 1.3155 to 1.311 after the data release. The dollar might strengthen even further in the week ahead. Current support level for EUR/USD is 1.3080 March low followed by 1.3062 fibonacci retracement level (from 1.3362 to 1.2866. Resistance levels are the 1.377 fib level and the February high of 1.3258.

Dollar Surges on Solid Non-farm Payroll Data

forexsource — Fri, 02 Feb 2007 14:16:08 +0000

Non-farm payrolls added 111,000 jobs in January and the U.S. unemployment rate rose to a four-month high of 4.6 percent, the Labor Department reported Friday. Economists expected unemployment to remain at December’s level of 4.5 percent. A gain of 150,000 was expected in the Non-farm payrolls figure.
According to the Labor Department the majority of the hiring took place in the service sector, which added 104,000 jobs, while manufacturing posted its seventh straight monthly loss.
The 111,000 payroll gain followed an upwardly revised 206,000 jobs created in December and 196,000 in November, the department said. The department initially reported 167,000 jobs created in December and 154,000 in month of November.
Average hourly earnings rose by 0.2 percent to $17.09, which was less than a gain of a 0.3 percent forecast.
As seen on the one minute of EUR/USD, the dollar started weakening at 08:28 pm. Two minutes later as the negative number was released the EUR/USD broke the 1.3053 level (two week high). The surge in euro was short-lived as the positive revisions of the non-farm payroll numbers for December and November followed the January release. The market consolidated into a bearish descending triangle for the next 30 minutes which was followed by a plunge in EUR/USD as the dollar strengthened.

Non-farm Payroll - Technical Strategy

forexsource — Sat, 09 Dec 2006 03:55:42 +0000

The non-farm payroll report releases by the United States Bureau of Labor Statistics contains information on the current employment situation in the US. It is generally released on the first Friday of each month at 8:30 EST.
Non-farm payroll data creates large market moves in both the stock and currency markets. Average price movement right after the release is about 40-80 pips depending on the significance of the release and the price can move up to 100-130 pips before the end of the day.
High volatility and very rapid price movements which happen within minutes after the release provide huge profit potential. However, due to high volatility and a large number of trades that are being executed in a very short amount of time trading the release can result in gaps and slippage which can lead to large losses. Therefore a good strategy would be not to trade the breakout right after the release, but let the price break out and then depending on chart patterns or technical indicators enter into a trade. For example, the chart below is EUR/USD one minute chart for December release of non-farm
payroll. The release came positive for the dollar - we see a spike down at 8:30. However if you entered into a trade in the initial direction of the spike you would most likely end up with a loss since (as seen below) the price started to form a bullish ascending triangle minutes after the release. At 8:47 the price broke the 1.3277 resistance which resulted in a 54 pip rally for the EUR/USD.
A profitable strategy would be to spot the chart formation (bullish ascending triangle), notice that MACD is above zero signifying potential upward move. Once these technical parameters are identified place a buy order at 1.3287 (10 pips above the resistance) with a stop at 1.3272 (15 pips below the entry) and first profit target at 1.3217. Result: 30 pip profit.