US Nonfarm Employment Change comes this Friday at 12:30 GMT.

If actual data comes inline with market forecast:

Expectations for this month reveal that the Non-Farm Employment Change figures will drop by 73K from July. Such a result, should it take place, will be the biggest drop in employment numbers that the U.S economy has experienced since April of this year. Previous surveys have shown that publications that reflect a significant contraction in the job sector had a radical impact on the USD, and concluded in a sudden downtrend. Considering that the survey has delivered negative figures for several consecutive months now, another sharp drop could signal a temporary halt in the Dollar’s bullishness, and the USD could be facing an unfortunate weekend, causing the EUR/USD pair to rise back toward levels around 1.4700

If actual data surprise with bullishness

If the actual figure is higher than forecasted, traders are likely to see the USD appreciate against other majors. Currently, investors are setting their positions on the USD based on the assumption that by the end of the week, the USD should face a sharp bearish movement. However, in case that the survey will deliver better figures than expected, such as 40K drop instead of the forecasted 73K drop, investors will be compelled to reevaluate their strategies, and go long on the USD. In this turn of events, the Dollar might receive an extra boost that will broaden its bullish voyage, and the EUR/USD could drop toward levels of 1.4350, breaking what would be a 9 month record.

Make sure you are prepared for Friday, otherwise do not trade, wait for the “craziness” to die out.

Truly yours,
Practical Trader

This entry was posted on Wednesday, September 3rd, 2008 at 12:40 pm and is filed under Daily market comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.