Trade NFP based on historical Correlation

Transcription

1 Today we are waiting the big US data to be released NFP (Non-Farm-Payroll); Which markets do expect that the economy successfully will add 210,000 to 216,000 jobs and the unemployment rate would fall to 6.6%.We did have mentioned at our previous reports the importance of that reading and how the Fed members closely monitor that numbers to decide the monetary policy approach to follow. Generally speaking; a high NFP release means a bullish US dollar; while a low reading of NFP a bearish sentiment for US dollar. However, the market is still negatively affected by Ukraine crises and last negative Q1 GDP reading for US, So today the market is looking for a relief by a positive reading at 2:30 pm GMT. So, let s review the reading from the beginning of 2014 and its effect EURUSD and Gold: Date Actual Forecast Previous Jan 10, K 199K 197K Feb 7, K 151K 129K Mar 7, K 185K 75K Apr 4, K 196K 241K 1

2 Previous Price action: 4 April reading EUR/USD; 15 Min Time Frame; - 39 Pips XAU/USD; 15 Min Time Frame; Pips 2

3 Today Scenarios EURUSD EUR/USD; 4H Time Frame As we can see from the chart; EUR/USD on 4H time-frame, is trading on the pivotal area of ; On news or even before any successive close under that levels we would expect a more downside to the levels of which represent a major support.however; our expected scenario is upward short term trending to the resistance of XAUUSD XAUUSD; 4 H time frame 3

4 As we can see on that chart ; Gold is traded near from the down trend, So, We will have 1288 as a resistance and 1280 to 1275 as support ; Any successive break of one of these levels would means more trending on the breakout direction. However, we do expected the upside breakout of 1288 which mean the next target would be levels.however, in case the downside breakout of the levels of the level of 1250 is the major support and our short-term target. Moreover, I do not want you totally forget about Ukraine tensions and its effect on the market; which drive the demand to the safe have Today morning the 10 Years German bonds yields on its low level. So; do trade the reading with an eye on the Ukraine geopolitical tensions. Finally, we would have the recent correlation between major markets: EURUSD (yellow) S&P (Green) XAUSD (Pink) US unemployment rate (blue) As we can see from this comparison there is a positive correlation between S&P (Equity market) & EURUSD (Currency market), and both of them has negative correlation to US unemployment rate and gold prices. So now do you know how to use this historical correlation to your side? Please us for further discussion. 4

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