EUR/USD Is About to Be Crushed by Positive NFP


This could be a good time to become a Forex trader. NFP Friday is in the lead up to an expected Fed interest rate hike.

Truth be told, it doesn’t get better than this, concerning trading possibilities on the back of markets re-pricing when reality doesn’t meet expectations.

With WBP Online going away for good, we’ve switched up our forex economic calendar to use the Myfxbook feed. There’ll be some of the most popular widgets on the calendar page soon to make it a go-to place for news and sentiment trading. Keep an eye on this space!

But all that matters tonight is NFP:

USD Average Hourly Earnings m/m: 0.2% expected and 0.1% previously.
USD Non-Farm Employment Change: 171K expected and 151K previously.
USD Unemployment Rate: 4.9% expected and 4.9% previously.

If you look at the economic data for the past month, pretty much across the board it’s better. On our new calendar page, scroll back and click each release for a detailed historical chart comparing expecations with the actual release.

This is why the US Dollar ralying off support in anticipation of further good news is no surprise:

USDX daily

USDX daily

Looking for a chart we can look to trade this USD sentiment off of, brings us to EUR/USD.

On a parralel storyline, we have been speaking about the fact that Deutche Bank is in trouble. But as you can see in the charts from that post, the Euro wasn’t reacting off the move.

Furthermore to this narrative, we overnight got International Monetary Fund managing director Christine Lagarde telling Bloomberg TV that the sooner Deutsche Bank reaches a settlement with the US Department of Justice, the better it will be for all involved.

“A bad settlement is always better than a good trial.”

EUR/USD daily

EUR/USD daily

So now a week later, EUR/USD has started to move. Euro weakness on the back of banking system uncertainty combined with US Dollar strength thanks to huge market anticipation on data and the Fed.

The potential for this support level to be absolutely obliterated heading into tonight if the number beats expectation is real!

Are you anticipating a EUR/USD breakout to the downside? Let us know on the @VantageFX Twitter account.

This Friday

CNY Bank Holiday

GBP Manufacturing Production m/m

CAD Employment Change

CAD Unemployment Rate

USD Average Hourly Earnings m/m

USD Non-Farm Employment Change

USD Unemployment Rate

This is a guest post originally appeared on Vantage FX. Reposted with permission.

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