Trading the U.S. Non-Farm Payrolls Release

| Thursday, 2 February 2012 22:44
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(eToro Blog) The United States will release Non-Farm Payrolls (NFP) data on Friday, February 3rd 2012. The market consensus is for the creation of 153K jobs in the month of January. Market expectations are cautious after the December report which showed that 200K jobs were added to the economy in the same month. In his testimony to Congress today, Fed Chairman Ben Bernanke said indicators of spending, production and labor markets have shown some signs of improvement.


Recent U.S. economy developments to take in consideration

The latest GDP report showed that the U.S. economy expanded 2.8% in the fourth quarter of 2011. The Fed has pledged to keep rates low until late 2014 at its last policy meeting. With the Fed aggressively trying to rescue the economy, 30 year mortgage rates hit a record low this week of 3.87% this week. Inflation dropped to 3% in December on a yearly basis. The unemployment rate dropped to 8.5% in December, a drop of 0.2%.

Market reaction to last month’s NFP release

The EURUSD dropped 90 pips after the announcement as the better than expected jobs report sent the U.S. Dollar higher.

Scenario A

If data is better than expectations and the previous month’s data is revised upwards, the EURUSD might fall 100 pips on the Dollar strength.

Scenario B

If data is worse than expectations and there is positive news out of Greece, the EURUSD might break range to the upside and target 100 pips higher.

Scenario C

If data is mixed, we will expect the EURUSD to continue to trade in a range between 1.3100 – 1.3200.


With the EURUSD in a range between 1.3100 and 1.3200, OpenBook traders who are scalping the range have done well. OpenBook trader pyruss who has 401 copiers and 3094 followers has been looking for buying opportunities as the EURUSD neared 1.3120 and selling near the top of the range near 1.3175. This strategy allowed the trader to scalp some quick profits with gains between 1.6% and 4%.

OpenBook trader babczyk who has a different trading strategy than pyruss has been building up short EURUSD exposure. The trade has been shorting the EURUSD and going against the trend. He has booked some profitable short trades in this ranging environment between 3% and 10% gains. Looking at his open exposure, this trader is targeting the EURUSD to fall towards 1.2874. This Euro bear has 1178 copiers and 8476 followers on OpenBook. He has gained 101.4% in the last six months.

OpenBook top trader NMarijus is also a Euro bear and is expecting the pair to fall towards 1.2725. This trader after taking some losses on long EURUSD trades switched to a Euro bear and has been booking trades with profits between 5% and 9%. NMarijus does not scalp but rather holds his opinion for medium term trades. This trader has 2585 copiers and 15828 followers on OpenBook.

OpenBook traders are primarily long on EURUSD with average limits at 1.3250 and stops at 1.3000.

Copyright 2012 eToro Blog

Note: Past performance is not an indication of future results. This post is not investment advice. CFD trading bears risk to your capital.
| Thursday, 2 February 2012 22:44
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