There's uncertainty in the market today as traders wait for the US NFP number and for Bernanke's address to the Congressional Budget Committee later today.
AUDUSD began the week with a high of 1.0214 on Monday. The weekly trend has been down with a low of .9908 this morning. Next major support level is the uptrend line from June at .9849
EURGBP has also trended down this week, going from a high of .8646 on Monday to a low yesterday of .8395 which is about where it is this morning. The uptrend line from June comes in at .8334
EURJPY (I'm still short) went from a low of 107.80 on Monday to a high of 110.24 on Tuesday. It has been dropping and is desperately trying to base in the low 108 area.
EURUSD (I'm still short) never made it above 1.3434 this week on Tuesday. It is current low this morning is 1.2961. There's a speed line coming in at 1.2807 which should hold as support but we'll have to see—there's so much negative sentiment out there.
GBPJPY began the week with a low of 125.78 and trotted up to a high of 129.31 on Wednesday. It has been fighting that resistance level since then. If it breaks through, the next resistance is 131.38, a downward trend line from last April.
GBPUSD (the market filled my long limit order of 1.5419 overnight but I've already moved my stop to breakeven as the uncertainty is too great to let the trade alone today) saw a high of 1.5646 on Tuesday before dropping to a low overnight of 1.5407. It's possible the small triangle on the daily chart will provide the next resistance at 1.5610.
USDCAD started the week with a low of .9890 from where it leapt to a high of 1.0034 Tuesday. Alas, it has been struggling ever since. The uptrend line from .9890 might provide support at .9941.
USDCHF (I'm long with three positions) look comatose Monday, with a low of .9323. It's the poster child of success this week, climbing to a high of .9708 yesterday. This is near the 50% of the move down from 1.0066 so let's see how it fares.
USDJPY touched a low of 81.97 on Monday. It then marched upwards where it is currently struggling with a downtrend line from June coming in at 88.39.
Showing posts with label NFP. Show all posts
Showing posts with label NFP. Show all posts
Friday, January 7, 2011
Friday, December 3, 2010
Markets Waiting for NFP
There's not going to be a lot of action until after NFP. I don't trade news events (nor should you—that's short term trading taken to the absurd) but the results should give some insights. An experienced trader once told me that if a commodity (i.e. the USD) doesn't fall on bearish news or rise on bullish news then the news is not what it appears.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
Friday, March 5, 2010
Nonfarm Payroll
Since the market is a bit moribund this morning, I thought I'd post something I wrote to a trader's group I belong to after the last NFP report. I've found that most people don't understand this report and certainly don't read the thing. It's 42 pages long, after all, and most people have a life. I must not have a life because I do read it. The reason I do is that it's in the details that one can start to ferret out what the true picture is. This is part of what I posted to the trader's group on last month's numbers:
Changes in the establishment data (Summary Table B) are where a wealth of information is found. The reason this is so interesting is that this data is not self-reported but is calculated from payroll records so it gives a clue as to whether new jobs are being created or lost. You can't just look at the total number though because it includes government employee numbers and these don't say much about the economic growth. For January, total nonfarm is -20,000; if you net out the -8 for the government it's still almost flat. Differences in hours worked, which is much more relevant, is also almost flat (Jan '09 was 34.2 and the numbers for Nov, Dec, and Jan '10 are 33.9, 33.8 and 33.9 respectively. Ideally, one wants to see a number over 41 so the economy is still struggling but it's not tohu-bohu. Looking at the manufacturing component of that (which is a good indication of economic activity), the numbers are also flat which is encouraging (39, 39.6, 39.6, and 39.9 for Jan '09, Nov, Dec, and Jan '10 respectively). It would be nice if they were a bit higher but again not a catastrophe.
The numbers that are troubling are the number of long-term unemployed Table A-12). Those unemployed 27 or more weeks were (in thousands) 2,742 in Jan '09. In Dec '09 they were 5,896 and in Jan '10 the number is 6,423. However, if the number of unemployed 5 weeks or less goes up it's almost worse because this means there is a spike up in layoffs. This unadjusted number was 3,464 (all #s are in thousands) in Jan '10 up from 2,871 in Dec. However it's down from 4,137 in Jan '09 and that's quite a decrease. The seasonally adjusted number is more relevant and that shows up 3008 in January from 2929 in Dec which is not much of a jump at all and it's down from the 3,633 in Jan '09. I compare the up/down for the months to the report the same time for the last three years but, as I'm always reading in this forum, I don't want to spoon feed anyone so I won't bother revealing that.
Another area of interest is watching the changes by industry. All of these net to the total number that's bandied about. This is table B1 and anyone truly interested in getting a look on which sectors are leading and which are lagging should peruse it each month. I'm not going to go through it but there are no shockers here and it's pretty much what you'd expect. With other data in the report you can also glean percentages as to what industries are adding payroll.
The issue of the under-reported is where people come up with numbers that are sometimes double what the government reports. These are the people too discouraged to look and those that really want full time work but have been forced into accepting part time jobs. The government numbers do try to recalculate based on this and it's found in table A15. Here the number for Jan '10 is a walloping 16.5 seasonally adjusted which it really has to be. Before the doom and gloom crowd starts storing up supplies and hoarding guns and gold, though, it's important to note that this number has been decreasing, albeit slowly (numbers for Sept to Dec are 17.0, 17.4, 17.2, and 17.3). It's up from the 14.5 of Jan '09. However, again, employment numbers lag so that needs to be taken into consideration.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
Changes in the establishment data (Summary Table B) are where a wealth of information is found. The reason this is so interesting is that this data is not self-reported but is calculated from payroll records so it gives a clue as to whether new jobs are being created or lost. You can't just look at the total number though because it includes government employee numbers and these don't say much about the economic growth. For January, total nonfarm is -20,000; if you net out the -8 for the government it's still almost flat. Differences in hours worked, which is much more relevant, is also almost flat (Jan '09 was 34.2 and the numbers for Nov, Dec, and Jan '10 are 33.9, 33.8 and 33.9 respectively. Ideally, one wants to see a number over 41 so the economy is still struggling but it's not tohu-bohu. Looking at the manufacturing component of that (which is a good indication of economic activity), the numbers are also flat which is encouraging (39, 39.6, 39.6, and 39.9 for Jan '09, Nov, Dec, and Jan '10 respectively). It would be nice if they were a bit higher but again not a catastrophe.
The numbers that are troubling are the number of long-term unemployed Table A-12). Those unemployed 27 or more weeks were (in thousands) 2,742 in Jan '09. In Dec '09 they were 5,896 and in Jan '10 the number is 6,423. However, if the number of unemployed 5 weeks or less goes up it's almost worse because this means there is a spike up in layoffs. This unadjusted number was 3,464 (all #s are in thousands) in Jan '10 up from 2,871 in Dec. However it's down from 4,137 in Jan '09 and that's quite a decrease. The seasonally adjusted number is more relevant and that shows up 3008 in January from 2929 in Dec which is not much of a jump at all and it's down from the 3,633 in Jan '09. I compare the up/down for the months to the report the same time for the last three years but, as I'm always reading in this forum, I don't want to spoon feed anyone so I won't bother revealing that.
Another area of interest is watching the changes by industry. All of these net to the total number that's bandied about. This is table B1 and anyone truly interested in getting a look on which sectors are leading and which are lagging should peruse it each month. I'm not going to go through it but there are no shockers here and it's pretty much what you'd expect. With other data in the report you can also glean percentages as to what industries are adding payroll.
The issue of the under-reported is where people come up with numbers that are sometimes double what the government reports. These are the people too discouraged to look and those that really want full time work but have been forced into accepting part time jobs. The government numbers do try to recalculate based on this and it's found in table A15. Here the number for Jan '10 is a walloping 16.5 seasonally adjusted which it really has to be. Before the doom and gloom crowd starts storing up supplies and hoarding guns and gold, though, it's important to note that this number has been decreasing, albeit slowly (numbers for Sept to Dec are 17.0, 17.4, 17.2, and 17.3). It's up from the 14.5 of Jan '09. However, again, employment numbers lag so that needs to be taken into consideration.
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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