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- U.S. Non-Farm Payrolls (NFP) to Expand 200+K for Twelve Consecutive Months.
- Employment Rate, Average Hourly Earnings Expected to Narrow in February.
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Trading the News: U.S. Non-Farm Payrolls
Another 235K rise in U.S. Non-Farm Payrolls (NFP) accompanied by a downward revision in the jobless rate may heighten the bullish sentiment surrounding the greenback and spur a further decline in EUR/USD as it fuels bets for a mid-2015 Fed rate hike.
What’s Expected:
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Why Is This Event Important:
However, a slowdown in Average Hourly Earnings may spur a mixed market reaction as the disinflationary environment dampens the Fed’s scope to normalize monetary policy, and Janet Yellen and Co. may ultimately share a similar fate to its U.K. counterpart as wage growth continues to lag behind the economic recovery.
Expectations: Bullish Argument/Scenario
| Release | Expected | Actual |
| ISM Non-Manufacturing (FEB) | 56.5 | 57.1 |
| Gross Domestic Product (QoQ) (Annualized) (4Q S) | 2.0% | 2.2% |
| JOLTS Job Openings (DEC) | 4983 | 5028 |
The expansion service-based activity along with the rising number of job openings may generate a robust employment report, and a pickup in job/wage growth may spur a bullish reaction in the greenback as it boosts bets for higher-borrowing costs in the world’s largest economy.
Risk: Bearish Argument/Scenario
| Release | Expected | Actual |
| Challenger Job Cuts (YoY) (FEB) | -- | 20.9% |
| Personal Income (JAN) | 0.4% | 0.3% |
| Consumer Credit (DEC) | $15.000B | $14.755B |
However, the ongoing rise in planned job-cuts paired with subdued household earnings may encourage the Fed to further delay its normalization cycle, and a marked slowdown in private wages may dampen the appeal of the reserve currency as it drags on interest rate expectations.
How To Trade This Event Risk(Video)
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Bullish USD Trade: Employment/Wage Growth Beats Market Forecast
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Need red, five-minute candle following the release 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. Non-Farm Payrolls (NFP) Report Disappoints
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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 reverse