Trading EUR/USD During the NFP Release

Don’t let the shortened trading week stop you from catching pips! There might be a good opportunity to make some profits by playing EUR/USD when the U.S. releases its December NFP figure at 2:30 pm GMT on Friday.

The monthly NFP release is a pretty huge deal for the U.S. economy and the Greenback as it reflects the change in employment in both the public and private sectors. Since it shows how many individuals were hired or fired during the period, it can provide clues on future economic activity in the country.

With the Fiscal Cliff discussion still more of a cliffhanger at the moment, traders might turn their focus to the upcoming jobs report. And with lower liquidity during this shortened trading week, dollar pairs could be subject to higher volatility.

What can we expect for the December NFP figure?

Net hiring is expected to be up by 135K in December 2012, slightly lower than November’s 146K rise in employment. If the actual figure comes in as expected, it should be enough to keep the jobless rate steady at 7.7%.

Note that initial jobless claims figures have been coming in mostly better than expected for the past few weeks, hinting at a potential upside surprise in the December NFP report. However, the looming Fiscal Cliff could have forced some companies to shed a few jobs here and there in order to cut costs.

How does EUR/USD usually react?

November 2, 2012 NFP Release

EUR/USD November Chart

December 7, 2012 NFP Release

EUR/USD December Chart

Based on the charts above, it appears that the dollar has had a positive correlation with recent NFP results. This suggests that a better-than-expected figure for December 2012 could lead to a EUR/USD sell-off.

Tips and tricks for EUR/USD

Given the pair’s tendencies around the release of the NFP, we can develop a strategy that may help with trading EUR/USD:

1. If price consolidates early in the day, you have the option to play a break of the Asian box. Short below the range’s support and aim for a maximum of 50 pips if you’re expecting a sell-off. On the other hand, if you think the pair will stage a rally, look to go long after a convincing close above the box.

2. Avoid entering at market if you want to trade the report’s actual release. The market has a tendency to return to the event bar’s open price, which could give you a chance to get in at a better price.

3. While it’s not uncommon to see 50-pip moves within the first two hours of the NFP release, you should be aware that EUR/USD sometimes stages major reversals in the middle of the New York session. That said, you may want to take profit (or trim your position) midway into the New York session, or once the market has drifted 50 pips in one direction.

Happy trading, folks!


  • Turab Mithaiwala

    hi like to ask do u have graph next to price an u have relative strength an charts that indicate today mkt is good or bad i m asking this we have in equity mkt but i have no idea about currency mkt so kindly advise an does it work movement on percentage like +0.03 an -0.05 etc we use this as a guide in currency trading i saw this in iforex but that guy hacked my 100 dollars never mind i will earn it back what i have asked can u help me or if there is some thing else can u advise me tks i know it sound stupid but with time i will learn tks

  • bashar

    explanation for what really happened?!
    is that available?!

    Regards,