Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

76.5% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

NFP Cheat sheet. How not to miss good trades?

NFP Cheat sheet. How not to miss good trades?

Information is not investment advice

What will happen?

Non-farm payrolls will come out on Friday at 15:30 MT (GMT+3). NFP is one of the most significant economic indicators for the US dollar and thus for most currency pairs on the Forex market. This indicator will reveal how many Americans got a job in April, excluding those who work in the farming industry. In general, the more people are employed, the better it is for the economy! Easy, right?

But let’s go a little bit further. NFP serves as a base for the future rate decision by the Federal Reserve – the US central bank. The high level of NFP increases the chances the Fed raises interest rates in the future, which will push the USD upward. On the other hand, the decline in the NFP figures signals the economic slowdown and reduces the possibility of rate hikes by the Fed, which is a negative factor for the USD.

How to trade on NFP?

It’s necessary to pay attention not only to NFP but also to monthly average hourly earnings and the unemployment rate. So, there are three indicators to follow. Compare the actual numbers with the market expectations and follow the rule below.

  • If all three indicators come out better than the forecasts, the USD will rise.
  • If all the indicators are worse than the forecasts, the USD will drop.
  • If NFP comes better, but earnings – worse, the USD will spike at first, but it will fall with the wave of shorts.

*The market reaction tends to be like that, but it doesn’t mean it will happen 100%.

Check our special strategy for trading on NFP!

What are the forecasts?

You can see the forecasts in the picture below. To check actual numbers, go to the economic calendar at 15:30 on Friday. After the impressive 916,000 gain in March, the US economy is on course to add another 978,000 jobs in April. Some analysts believe the number can top 1 million. It would be an event to see!

for_article_nfp.png

Why does it important?

There were talks among investors that the Fed is going to hike rates soon as the recovery is faster than expected and inflation is rising, so the Fed should take actions not to allow the economy to overheat. Actually, Treasury Secretary Janet Yellen gave voice to the same thought yesterday, but then downplayed it. However, that was enough to send the USD soaring. Indeed, the last word is on the Fed but any tapering comments tend to move the US dollar higher.

In short, the main question for traders is when the Fed starts tapering (cut asset purchases and then raise rates). Therefore, NFP is not just some labor figures, it’s a key issue for the further Fed’s policy, which is the main driver for the USD.

What to trade?

As mentioned above, NFP will impact currency pairs with the USD such as EUR/USD, GBP/USD, AUD/USD, USD/JPY, etc. Besides, gold (XAU/USD) may be impacted as well. If NFP figures are better-than-expected, the USD will rise and drive EUR/USD, GBP/USD, AUD/USD, and gold down, while USD/JPY and USD/CAD up. If worse, the USD will fall and drive EUR/USD, GBP/USD, AUD/USD, and gold up, while USD/JPY and USD/CAD down.

Tech analysis

Tech analysis

EUR/USD has failed to break the 50% Fibonacci retracement level of 1.2070 so far. If NFP figures are worse than expected, EUR/USD is likely to break the resistance of 1.2070, so the way up to the 61.8% Fibo level of 1.2090 will be open. On the flip side, if NFP figures are better than expected, the pair may drop, and move below the 38.2% of 1.2050, which in turn will open the doors towards the next support of 1.2025.

EURUSDH4.png

LOG IN

Similar

US Interest Rate Slowdown?

The US Federal Reserve may refrain from more aggressive interest rate hikes in March due to geopolitical risks after Russia's special operation in Ukraine…

Popular

It’s Time to Look at New Zealand

Inflation in New Zealand is the highest since 1990, edging to 7.3% in Q2 2022. The currency is under heavy pressure as the Reserve Bank of New Zealand is trying to reverse the inflationary spiral. The week ahead will give us a valuable clue about the country’s monetary policy, and we are here to talk about that.

Choose your payment system

Feel the Team Spirit

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later