A1 Trading Company

December 7, 2023

NFP Tomorrow

Frank Cabibi

Here are some more setups for tomorrow's NFP numbers in the US. There could be a bullish case for both scenarios of a higher or lower number, and here's why.

EdgeFinder Analysis

UJ is no longer a bullish reading on the EdgeFinder. The recent score flip happened just days before the nearly 2% drop in price today after Ueda hinted to higher rates in the future. Getting interest rates back to positive is a huge momentum shifter in JPY pairs.

Because of this, the yen will probably not be in any more weakness for some time, as loose policy is coming to a close. On top of this, investors are anticipating rate cuts in 2024 in the US. This could be the start of a long term down trend in the UJ pair.

The bullish case for NFP tomorrow can be argued either way. So we should weigh the options in the short term on what could be the best potential play. Higher NFP is a good sign for the economy, and it generally causes more demand in the stock market.

However, more jobs can lead to more spending which could lead to higher inflation. Less jobs means there was a slowdown in the labor market which is also a good sign that the Fed will continue to keep rates at a hold or think about cuts in the future.

EURUSD is a bullish reading on the EdgeFinder right now from what used to be a bear score in November. USD pairs like EU and GU tend to share similar behavior to the US stock market. So, the argument stated above for SPX500 applies to EU.

On top of this, COT is more interested in the euro according to the last week's COT report. Meanwhile, retail remains mixed on this pair. Seasonality points towards the most bullish month of the year as well. The only factors holding this pair back from being a strong buy are retail, inflation and trend reading.

Retail Spotlight

Retail sentiment is now short on all the US indices while mixed on the majority of US pairs. The most longed pairs are USDCHF and AUDUSD, leading to a contrarian signal from the EdgeFinder.

Smart Money Spotlight

Smart money still shows selling on the USD and JPY. But this Friday's report may show a positive change into the yen from Tuesday this week. EUR and SPX saw considerable interest from institutions as well indicating more risk-on sentiment.

Fundamental Spotlight

When comparing the labor markets of both Europe and the US, EUR has the advantage. The pair needs to see another miss in NFP numbers tomorrow to keep the strong +3 score in the labor market section.

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

Hotter CPI Shakes Markets

Yesterday's CPI numbers in the US caused considerable doubt in the expectations of a June rate cut. This morning's PPI came in lower than expected. But, it might not be enough to convince investors of a summer rate cut. EdgeFinder Analysis EURUSD is a -8 now on the EdgeFinder indicating dollar strength after the higher […]

Read More
Key Inflation Data Weighs on Investor Sentiment

Wednesday's inflation report in the US will be very pivotal in how USD-related assets will react for the next month. Higher CPI has investors worried of the Fed who still looks to cut rates at some point this year, but the inflationary trend could determine when these rate cuts come. EdgeFinder Analysis We have been […]

Read More
PMI Pushes Higher into Expansion

This morning's ISM Manufacturing PMI data came in higher than expected this month at 50.3. Here is what investors might be thinking in regards of the latest numbers, and why this could be bearish for the dollar. EdgeFinder Analysis USOil's score drops at the start of this month as the seasonality on the 10-year average […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram