HOW TO TRADE JUNE NFP (FOREX STRATEGY)
Good morning Platinum Traders,
I hope everyone enjoyed the shortened week with the long Bank holiday last weekend. With the First Friday of the month tomorrow it’s going to be NFP time. With a busy schedule in June with key trading events including FOMC, Federal funds rate, CPI y/y Platinum members are looking to take some serious Pips.
We ran a live event last month which saw member and attendees generated over 100+ Pips on the event.
This month, however, we wanted to go one step further and invite you to a private session with a trader to learn how to trade this monthly critical event.
The non-farm payrolls report is one of the most-anticipated economic news reports in the forex market. It is published on the first Friday of the month at 8:30 AM Eastern time by the U.S. Bureau of Labor Statistics. The data in this report is an indicator of the employment situation in the US. It measures the change in the number of newly-employed people in the United States (excluding workers in the farming industry) since the previous month, hence the name: Non-Farm Payroll
As one of the most-anticipated economic news events of the month, currency pairs (especially those involving the US dollar) typically see big price movements in the minutes and hours after the data is released. Platinum Traders always look at this as a great opportunity with a sound strategy to take advantage of the volatility.
If you are new to Forex, then you need to understand that the release of the Non-Farm Payroll reports every month is a currency market moving event. The Progress of the US Economy is measured by 12 Major Fundamental Events, and the Non-Farm Payroll is a leading-indicator that measures the job-creation aspect of the Economy.
Job creation is an important leading indicator of consumer spending, which in turn accounts for a majority of overall economic activity. Typically, Platinum Traders will aim for 150 pips trading this event, so it certainly gets your month off to a great start when traded correctly.
NFP REPORT LAST MONTH
According to the report released in May, for the month of April, the Non-Farm Employment Change produced lower figures than expected, and that didn’t materially change expectations for the Economy. The April report came out at 164K, against a forecast of 190K.
MARKET SENTIMENT
Fundamental is a big part of currency trading, and Sentiment is built on currency market trends. The last NFP report was a weak one, but the fact is that both the Economy and Labour Market are in good shape. However, the NFP report to-be-released tomorrow will have great significance due to the recent USD bulls in the market and how volatile the market has reacted to the buying up of the USD.
NFP TRADING STRATEGY
How to Trade the Euro on NFP:
The expected number for April in the NFP report to be released this Friday is 190K. The deviation figure to trade the Non-Farm Payroll is +30/-30.
Let me explain what this means:
The Bear Trade
If the actual number on NFP is above 220K, compared to the estimated 190K, sell the EUR/USD with 25 pips stop loss.
The Bull Trade
If the actual number on NFP is below 160K, compared to the estimated 190K, buy the EUR/USD with 25 pips stop loss.
How to Trade the Yen on NFP:
The expected number is 190k. The deviation figure to trade the Non-Farm Payroll is +50/-50.
The Bull Trade
If the NFP number is above 220K, buy the USD/JPY with 25 pips stop loss.
The Bear Trade
If NFP number is below 160K, sell the USD/JPY with 25 pips stop loss.
QUICK 4 TIPS FOR TRADING NFP
- Always keep the Institutional News Feed open.
- Be careful of being in trades an hour before and after NFP.
- Do not trade USD/CHF on NFP days
- Make sure you have your eyes on the clock. As soon as the news event comes out there will be a spike.
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Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Nisha Patel
Live from the Platinum Trading Floor.