NFP Cheat Sheet: Trading Tips

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What are the chances？

Non-farm payrolls are scheduled to be released at 15:30 MT (GMT+3) on Friday. It is one of the most important indicators for the US dollar and consequently for most currency pairs traded on the Forex market. Excluding those in agriculture, this metric will show how many people in the United States found work in April. In general, the economy benefits from increased employment. Simple, right？

Here are some more points to keep in mind. The Federal Reserve - the US central bank – uses NFP as a basis for future rate decisions. The likelihood that the Federal Reserve will raise interest rates in the future is enhanced by the high level of NFP, which raises the USD. NFP data have fallen, which indicates a slowdown in the economy and lowers the chances of the Fed raising interest rates, which is bad news for the dollar.

How do you trade the NFP？

In addition to NFP, monthly average hourly wages and the unemployment rate must be taken into account. There are three indicators to watch out for. The following is a guideline for comparing actual numbers to market expectations.

The dollar will rise if all three of these signs are better than expected.

The USD will fall if all of the indications are worse than expected.

In a situation when NFP is better but profits are worse, the USD will rise at first, but it will sink with the wave of shorts.

Market reaction is generally like that, but this doesn't indicate it will always be the case.

Check out our NFP trading approach!

What are the forecasts for？

The forecasts are depicted in the image at the bottom of this post. Visit the economic calendar at 15:30 on Friday to verify the data. The US economy is on track to add 978,000 new jobs in April, following a strong gain of 916,000 jobs in March. Some experts predict that the number could reach one million people. It'd be a treat to witness!