How to trade the US NFP with EUR/USD
|- The US Non-Farm Payrolls report is one of the biggest movers and wages are in the limelight.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
- The EURUSD moved, on average, 28 pips in the 15 minutes after the data release and 49 pips in the following 4 hours
Tradeable figure: Average Hourly Earnings (YoY)
Buying EUR/USD Scenario
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Tradable Negative Trigger: -0.9775 deviation (2.5208 ) [BUY Pair]
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Key Resistance Level: 1.1720
If it comes out lower than expected at a relative deviation of -0.9775 or less (2.5208 or lower in actual terms), the EURUSD may go up reaching a range of 47 pips in the first 15 minutes and 116 pips in the following 4 hours.
1.1665 separated ranges in late July. Further up, 1.1720 capped the pair both in June and in July. 1.1750 held the EUR/USD down no less than four times.
Selling EUR/USD Scenario
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Tradable Positive Trigger: +1.4699 deviation (2.9694%) [SELL Pair]
Key Support Level: 1.1575
This time, if it comes out at higher than expected with a relative deviation of 1.4699 or higher (2.9694 or higher in actual terms), the pair may go down reaching a range of 36 pips in the first 15 minutes and 64 pips in the following 4 hours.
1.1620 was a low point at the end of July. 1.1575 served as a swing low earlier in the month. 1.1508 is the trough of 2018.
EUR/USD Levels on the Chart
More data
Jobs are aplenty and economic theory suggests that wages should rise. Yet this is not happening at a satisfactory rate. Will it happen this time? Any change in salaries impacts the Fed's path of rate hikes and the US Dollar.
More: Non-Farm Payrolls preview: Watching wages, USD well positioned to ride higher
In the last five releases, the EURUSD moved, on average, 28 pips in the 15 minutes after the data release and 49 pips in the following 4 hours. The previous release had a surprise of -0.59762 in terms of relative deviation and the EURUSD reached a 22 pip range in the first 15 minutes and a range of 35 pips 4 hours thereafter.
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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