Things to Look Out for This Week – US Jobs Report 04/01/2021

Nigel Frith
Calendar with Money on top

The first week of 2021 indicates that the year might be more traditional than the tumultuous 2020. An economic calendar packed full of official announcements outlines the course of the next week. For once, market participants can prepare for news to come into the markets at pre-determined times rather than as surprise announcements.

Knowing when the news will be released doesn’t make the markets less interesting or safer, plus there are specific risks associated with the Non-Farm report’s publication.

US Jobless Data Looks Set to Dominate the Week

The US Non-Farm Payroll job numbers are due on Friday the 8th of January. Analyst forecasts are setting a pessimistic tone that has the potential to overshoot to the downside. If the numbers aren’t quite as bad as expected, there could be a short-term reversal in the eight-month slide in USD.

This would have implications for all other asset groups.

  • Silver, in particular, has found strength on the back of USD weakness.
  • A stronger dollar would make commodities, including oil, that are priced in USD more expensive for non-USD economies. The equity markets in Germany and Japan are particularly prone to oil price moves as both economies rely almost entirely on imports of crude.

When are the US Non-Farm Payroll Numbers Announced?

The headline number will likely lead to some whipsawing in price action. The numbers will be released at 08.30 hrs EST which equates to 13.30 hrs GMT.

USD Basket Price Graph

Source: IG

The bottom of the trading channel in USD Basket is currently in the region of 8890. Any surprisingly good news opens the way to the higher end of the channel which is in the region of 9150

Managing risk through NFP

The NFP report is probably the most important data release of the calendar month. It will help set the tone for days and weeks of activity on the financial markets with the immediate consequences of the announcement being something to watch out for.

  • Traders with a more risk-averse approach and the ability to scale back their book might take positions off until the news has been released.
  • Another approach towards managing whipsaw-risk is to take stop-losses off and monitor the market moves manually. While this does little to address the overall risk, it can avoid trades being closed out due to the volatile price moves that occur in the seconds after the news is released.
  • The Euro-dollar forex market might be an interesting one to follow this week. Being one of the most liquid markets globally, it’s easy for traders to get into and out of without incurring the costs associated with wide bid-offer spreads.

EURUSD set to continue upwards?

EURUSD has for eight months been a happy hunting ground for those betting against USD as the weekly price chart provided by BDSwiss shows.

EURUSD Price Graph

Source: BDSwiss

With price currently trading mid-channel, there is potential for the dollar to strengthen on the back of Friday’s NFP numbers being better than expected. There are still several trading sessions to go before the announcement, so it will be interesting to track the EURUSD price to see if investors begin taking positions in advance.

Nigel Frith

Latest news

Kardashian’s $1m Fine Is A Warning To All Influencers
Kim Kardashian agrees to pay a $1. Read more
The Loophole Desperate Investors Are Using To Scramble Out Of FTX
NFT loophole allows FTX investors to reclaim their funds Desperate measures appear to be the only option for beleaguered FTX investors Claims of a $1. Read more

Safest Forex Brokers 2022

Broker Info Best In Customer Satisfaction Score
#1 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
#2 BlackBull Markets LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
#3 75 % of retail CFD accounts lose money Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
#4 Forex Broker eToro Logo67% of CFD traders lose Founded: 2007 Global CFD & FX Broker
Number One Broker
#5 Plus500 Logo77 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008 Global CFD Broker
Number One Broker
Best Trading App Visit broker

    Forex Fraud Certified Brokers

    ATFX Logo
    AvaTrade logo
    XM Logo
    skilling logo
    BlackBull Markets Logo
    IQ Option Logo
    HYCM Logo
    Plus500 Small Logo
    Exness Small Logo Logo
    LegacyFX Small Logo
    OctaFX Logo
    IC Markets Logo
    City Index Logo