How to trade the Nonfarm Payrolls Report of Feb 7 2014?

How to trade the Nonfarm Payrolls Report of Feb 7 2014?


 The US Non Farm Payrolls publication is considered as one of the most important indicators that measures the economic health.

US NFP Employment also measures the change in number of employed people during the previous month, excluding the farming industry. A rising trend has a positive effect on the country’s currency.
It is widely expected that the labor market will add 185,000 jobs higher than the previous reading (only 75.000 jobs) while the unemployment rate is expected to remain unchanged at 6.7 %.

Accordingly, the expected reaction scenarios will be as follows.

*The Upside/Bullish Scenario

We can see an increase of the employment numbers during the last month as expected (185.000). Also it can upbeat expectations and jump to breach up the barrier of 200 000 jobs. In this case, we can expect a rebound of the U.S. dollar, on the basis that this scenario may encourage the Fed to taper further the quantitative easing program. And it will continue reducing the monthly asset purchases until they ended later this Year.

*The Downside/Bearish Scenario

The NFPs can drop below expectations , means  below 185,000 jobs , which would weaken the U.S. dollar to a large extent where to review monetary policy adapted applied by the Fed, and It will be a signal the us economy remains vulnerable.
On the other hand, there is great anxiety that the Fed is moving ahead to slow easing, just as some disappointing data, like Monday's ISM manufacturing survey, is signaling a slowing economy.

 For this reason, Friday U.S. Nonfarm payrolls report is the major economic news event for this week. And please remain cautious in trading during the news. 

And of course we will update you with the major economic news, the NFP report and the daily Forecast analysis on our Daily Newsletters:

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