It’s a good day to be a Forex trader. NFP Friday in the lead up to an anticipated Fed interest rate hike.
Honestly, it doesn’t get much better than this in terms of potential for trading opportunity on the back of markets re-pricing when reality doesn’t meet expectations.
With WBP Online dropping off the face of the Earth, we’ve changed up our forex economic calendar to use the Myfxbook feed. We’ll be including some of the most popular widgets on the calendar page shortly to make it a go-to place for news and sentiment trading. Keep an eye on this space!
But all that matters tonight is NFP:
USD Average Hourly Earnings m/m: 0.2% expected and 0.1% previously.
USD Non-Farm Employment Change: 171K expected and 151K previously.
USD Unemployment Rate: 4.9% expected and 4.9% previously.
If you look at the economic data for the past month, pretty much across the board it’s better. On our new calendar page, scroll back and click each release for a detailed historical chart comparing expecations with the actual release.
This is why the US Dollar ralying off support in anticipation of further good news is no surprise:
Looking for a chart we can look to trade this USD sentiment off of, brings us to EUR/USD.
On a parralel storyline, we have been speaking about the fact that Deutche Bank is in trouble. But as you can see in the charts from that post, the Euro wasn’t reacting off the move.
Furthermore to this narrative, we overnight got International Monetary Fund managing director Christine Lagarde telling Bloomberg TV that the sooner Deutsche Bank reaches a settlement with the US Department of Justice, the better it will be for all involved.
“A bad settlement is always better than a good trial.”
So now a week later, EUR/USD has started to move. Euro weakness on the back of banking system uncertainty combined with US Dollar strength thanks to huge market anticipation on data and the Fed.
The potential for this support level to be absolutely obliterated heading into tonight if the number beats expectation is real!
Are you anticipating a EUR/USD breakout to the downside? Let us know on the @VantageFX Twitter account.
On the Calendar Friday:
CNY Bank Holiday
GBP Manufacturing Production m/m
CAD Employment Change
CAD Unemployment Rate
USD Average Hourly Earnings m/m
USD Non-Farm Employment Change
USD Unemployment Rate
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Dane Williams – @VantageFX
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