By ForexTime
During this past US nonfarm payrolls (NFP) release, which typically happens on the first Friday of every month, we held a webinar titled:
“Profit from Payrolls? How to Trade the NFP”
During this exclusive webinar on September 6th, we shared an overview of:
Perhaps more importantly for traders, during the webinar …
Free Reports:
We also shared some price targets for the US500 index (which tracks the S&P 500), the USDInd (US Dollar index), and XAUUSD (gold).
These price targets were oversimplified as an easy-to-track measure, solely looking at the incoming US unemployment rate:
– US500 index to rise to its 21-day simple moving average (SMA)
– USDInd to rise to its 21-day SMA
– XAUUSD to move down to its 21-day SMA
– US500 index to fall to its 100-day SMA
– USDInd to fall to around 100.5
– XAUUSD to soar to $2530 (or higher to new record high)
At 12:30PM GMT on Friday, September 6th, during our live webinar, investors and traders worldwide received these official numbers:
As a knee-jerk reaction immediately after the NFP data was released:
The above price action came as Fed funds futures markets also saw wild swings, before paring those bets for a jumbo-sized 50-basis point Fed rate cut on September 18th:
Once markets had more time to digest the data, they reached our forecasted prices:
This US stock index duly found support at that widely-followed technical indicator (100-day SMA) before bouncing higher today (Monday, September 9th).
To be clear, the US500 went in the “other” direction. We had initially anticipated the US500 to rise if shown the lower 4.2% unemployment rate.
Instead, stock markets preferred to focus on the hiring slowdown (lower-than-expected headline August NFP number, and the downward revision to the headline July NFP number), instead of the lower unemployment rate. Refer to numbers stated earlier in this article.
However, the fact that the US500’s declines last Friday was halted almost perfectly at its 100-day SMA proved true our expectations that this technical indicator would act as a critical support level.
After all, the latest US jobs report wasn’t all that bad.
The jobless rate ticked back down in August, while the creation of new jobs was still evident in the world’s largest economy.
This past Friday’s data release offered little that screams an imminent recession, nor the jarring need for a jumbo-sized 50-bps rate cut by the Fed this month.
Hence, once markets could hang on to a more sensible narrative:
… all as we had forecasted prior to the September 6th release of the US nonfarm payrolls report.
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com
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