How to trade the US ADP NFP with USD/JPY
|- The ADP Non-Farm Payrolls provides a snapshot of private sector employment and serves as a hint towards the official NFP.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
- The USD/JPY moved, on average, 25 pips in the 15 minutes after the data release and 69 pips in the next 4 hours.
Buying USD/JPY Scenario
- Tradable Positive Trigger: +1.92 deviation (235K) [BUY Pair]
- Key Resistance Level: ¥110.50
If it comes out at higher than expected with a relative deviation of +1.92 or higher (235K or higher in absolute terms), the pair may go up reaching a range of 27 pips in the first 15 minutes and 58 pips in the following 4 hours.
The round level of ¥110 is eyed by many market participants. Further above, ¥110.50 served as resistance back in February. The ¥111.50 level held the pair down back in late 2017.
Selling USD/JPY Scenario
- Tradable Negative Trigger: -1.36 deviation (175K) [SELL Pair]
- Fundamental Support Level: ¥109.00
If it comes out lower than expected at a relative deviation of -1.36 or less (175K or lower in absolute terms), the USD/JPY may go down reaching a range of 28 pips in the first 15 minutes and 79 pips in the following 4 hours.
¥109.50 temporarily capped the pair in late April. ¥109.00 supported the pair in mid-April. Further below, ¥107.90 capped the pair in late February and also in early April. Lower, ¥107.10 was resistance in early April.
USD/JPY Levels on the Chart
More data
In the last five releases, the USD/JPY moved, on average, 25 pips in the 15 minutes after the data release and 69 pips in the next 4 hours.
The previous release had a positive surprise of +1.95 in terms of deviation and the USD/JPY reached a 12 pip range in the first 15 minutes and a range of 57 pips 4 hours thereafter.
Automated Data Processing (ADP) is the largest provider of private sector payrolls in the US. The monthly report for the private sector moves markets. The figure published by the firm leads the official BLS Non-Farm Payrolls published on Friday and is seen as a hint of the event, even though the figures are not always well correlated. The March report by ADP showed a significant gain in private sector positions while the official figure badly disappointed.
See the preview: Private hiring set to double the historical standards for April
Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.
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