- U.S. Non-Farm Payrolls to Climb 180K, Unemployment Rate to Hold at 7.4%
- Labor Force Participation Slipped to 63.4% from 63.5% in June
Trading the News: U.S. Non-Farm Payrolls
With the U.S. economy is expected to add another 180K jobs in August, a pickup in job growth may fuel another near-term rally in the dollar as it raises the Fed’s scope to taper the asset-purchase program at the September 17-18 meeting.
What’s Expected:
Time of release: 09/06/2013 12:30 GMT, 8:30 EDT
Primary Pair Impact: EURUSD
Expected: 180K
Previous: 162K
DailyFX Forecast: 160K to 200K
Why Is This Event Important:
Indeed, a strong Non-Farm Payrolls report may spur a more material shift in the policy outlook as the Fed sees a stronger recovery in the second-half of the year, and it seems as though the central bank is slowly moving away from its easing cycle as the world’s largest economy gets on a more sustainable path.
Expectations: Bullish Argument/Scenario
| Release | Expected | Actual |
| ISM Non-Manufacturing (AUG) | 55.0 | 58.6 |
| ISM Manufacturing (AUG) | 55.0 | 58.6 |
| Gross Domestic Product (Annualized) (QoQ) (2Q P) | 2.2% | 2.5% |
The pickup in business outputs along with the faster rate of GDP growth may encourage a larger-than-expected rise in U.S. employment, and a positive print may foster a more meaningful rally in the dollar as the Fed looks to scale back on quantitative easing.
Risk: Bearish Argument/Scenario
| Release | Expected | Actual |
| ADP Employment Change (AUG) | 184K | 176K |
| Challenger Job Cuts (YoY) (AUG) | -- | 56.5% |
| Philadelphia Fed Business Outlook (AUG) | 15.0 | 9.3 |
Nevertheless, the ongoing slack in the real economy may drag on hiring, and another weaker-than-expected print may threaten the bullish sentiment surrounding the reserve currency as the Fed takes a cautious approach in implementing its exit strategy.
How To Trade This Event Risk(Video)
U.S. Non-Farm Payrolls Will Be Traded LIVE in Analyst-on-Demand
Bullish USD Trade: NFPs rise 180K or more; Unemployment Rate holds steady
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Need to see red, five-minute candle following the print to consider a short trade on EURUSD
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If market reaction favors a sell trade, short EURUSD 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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Shift stop to entry on remaining position once initial target is hit, set reasonable limit
Bearish USD Trade: Employment misses market forecast
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Need green, five-minute candle to favor a long EURUSD trade
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Implement same setup as the bearish euro trade, just in reverse