LiveLearnTrade Team
LiveLearnTrade
After a month of monetary madness in March, April will see the release of economic data, which will highlight the impact so far of COVID-19. As it is the first week of the new month, this Friday will see the much anticipated release of the US Non-Farm Payrolls. So what exactly is this? And how can a trader use this information?
Types of market analysis
Traditionally in financial trading there are two main ways to analyse a market and find potential opportunities. Most traders, especially day traders typically look at the technical side of analyzing. Which is heavily geared towards charting patterns and viewing historical data to help predict where future moves could potentially take place.
The second type of trading analysis is more driven by fundamentals and Macro economics. There are a variety of fundamentals that traders can look towards in attempting to find trade ideas. Below we explore one of the main types and understand how a trader can use it when in search of opportunities.
What is NFP?
The NFP or Non-Farm Payroll is probably one of the most viewed fundamental events in the world of trading. This is essentially the US employment report, which does not take into account jobs from the farming/seasonal sector. The NFP number is released once a month on the first Friday of each month, tomorrow April 3rd for example.
The number reports the stats from the previous calendar month. So the NFP report released in March will detail February’s jobs number and the number released tomorrow, will detail the numbers for March. In March the Coronavirus caused most countries to shut down, a lot of jobs lost in the process. In the US it was claimed 3.3 million people are now unemployed, as a result. Friday's figures will be the first time we will see how this record number of those claiming to be jobless, impact the unemployment rate which stands at 3.5%.
How do traders use the NFP?
So to simplify the above let’s look at the following equation.
- Better than expected Jobs Numbers = Strong USD = Weak Safe Havens (e.g Gold)
- Below expected Jobs Number = Weak USD = Strong Safe Havens (e.g Gold)
For the first time in history, tomorrow’s NFP is forecasted to come in at -100k jobs. Should this number come out better than expected, or worse then the above equation may hold true.
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Editors’ Picks
EUR/USD clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD snaps the two-day winning streak above 1.2450, eyes on US GDP data
The GBP/USD pair snaps the two-day winning streak near 1.2460 amid the modest rebound of the US Dollar on Thursday during the early Asian session. The release of the US Gross Domestic Product for the first quarter will take center stage on the day.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Editors’ Picks
EUR/USD clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.
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