US NonFarm Employment

Friday, March 05th (8:30 am New York Time) USA

We have US NonFarm Employment Change coming out. It is expected to read -30. Last month it read -20.

What they do is calculate the number of jobs in US this month versus previous month. When the number is positive, it means that there are more jobs in US this month over previous month. When the number is negative, it means that there are less jobs in US this month over previous month.

Higher number signifies that US economy is doing better, which in turn means that US will be more likely to eventually increase its interest rate. When interest rate of a country is higher, it attracts investors to buy its currency, which increases the value of the currency versus other currencies.

So, when US NonFarm Employment number comes out better than expected, traders tend to speculatively buy US dollars, so GBP/USD tends to go down. When US NonFarm Employment number comes out worse than expected, traders tend to speculatively sell US dollars, so GBP/USD tends to go up.

I recommend trading USD/JPY for this report.

The trigger for this indicator is 60. This means that if US NonFarm Employment Change comes out at +30 or better, USD/JPY will probably go up by 50 pips or more in the first 45 minutes of the report. If it comes out at -90 or more negative, USD/JPY will probably go down by 50 pips or more in the first 45 minutes of the report.

We will also have US Unemployment Rate and Revision coming out. A deviation of 0.2 on unemployment rate is considered significant but chances are good it will not conflict. Revision is also important and a significant conflict with revision number may mute the move greatly.

Obviously, the bigger the difference between expected and actual numbers, the bigger will be the move.