What is NFP? Be it a Professional Trader or a newbie trader. Every trader should be aware of what is NFP, and how it affects the forex market.
NFP stands for Non-Farm Payrolls which is the United States employment data, which is part of the Employment Situation report, issued by the Bureau of Labor Statistics, an agency for the U.S. Department of Labor. (DOL).
The NFP is part of a monthly report that shows how many people are employed in the US, in manufacturing, construction, and goods companies.
NFP gets its name from the jobs it excludes farm jobs and self-employed or non-profit organizations.
NFP is an important economic indicator related to employment in the U.S. and has a high impact on the economic market.
The NFP report is released every Friday of the first week of every month.
Why Traders Care?
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
What pairs will be affected by this NFP News?
XXXUSD = -XAUUSD
-XAGUSD
-GBPUSD
USDXXX = -USDJPY
-USDCAD
-USDCHF
As these pairs have USD as a base and quote, we can see high price volatility during the NFP news. There are 2 Post-news situations that can be seen in the USD market. The price might spike bullish and bearish for the next 10-30 minutes and sit back at the same price where it was before the news or price might shoot up or fall down quickly and follow up to that trend even after the news.
A soft reminder that trading during high-impact news is very risky and not advisable for newbie traders. It is also advised to always check for high-impact news before entering a trade position in any market.
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