DailyFX.com -
- U.S. Non-Farm Payrolls (NFP) to Expand 200+K for Second Consecutive Month.
- Average Hourly Earnings to Hold Steady at Annualized 2.2%- Slowest Pace Since July.
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Trading the News: U.S. Non-Farm Payrolls
Another 205K expansion in Non-Farm Payrolls (NFP) may heighten the appeal of the greenback and spur a near-term pullback in EUR/USD as it puts increased pressure on the Federal Open Market Committee (FOMC) to further normalize monetary.
What’s Expected:
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Why Is This Event Important:
However, market participants may pay increased attention to Average Hourly Earnings as the U.S. economy approaches ‘full-employment,’ and the ongoing weakness in private-sector wages may push the committee to further delay the normalization cycle as central bank officials highlight the downward tilt in inflation expectations.
Expectations: Bullish Argument/Scenario
| Release | Expected | Actual |
| ADP Employment (MAR) | 195K | 200K |
| Gross Domestic Product (Annualized) (QoQ) (4Q F) | 1.0% | 1.4% |
| Real Personal Spending (FEB) | 0.1% | 0.2% |
Signs of a stronger-than-expected recovery accompanied by the pickup in private-sector spending may encourage U.S. firms to expand their labor force, and a marked expansion in job/wage growth may boost interest-rate expectations as Fed officials project two rate-hikes for 2016.
Risk: Bearish Argument/Scenario
| Release | Expected | Actual |
| Challenger Job Cuts (YoY) (MAR) | -- | 31.7% |
| NFIB Small Business Optimism (FEB) | 94.0 | 92.9 |
| Consumer Credit (JAN) | $17.000B | $10.538B |
Nevertheless, waning business confidence paired with the rise in planned job-cuts may drag on labor market dynamics, and the dollar may face further losses over the near-term should the NFP report dampen the outlook for growth and inflation.
How To Trade This Event Risk(Video)
Bullish USD Trade: NFP Expands 205K+ Accompanied by Sticky Wage Growth
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Need red, five-minute candle following the NFP print to consider a short trade on EUR/USD.
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If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
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Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
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Move stop to entry on remaining position once initial target is hit; set reasonable limit.
Bearish USD Trade: U.S Labor Report Fails to Meet Market Expectations
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Need green, five-minute candle to favor a long EUR/USD trade.
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Implement same setup as the bullish dollar trade, just in the opposite direction.