Non-Farm Payrolls and the GBP/USD
It’s the first Friday of a brand new month, which means new Non-Farm Payroll numbers soon to be announced.
This report continues to be interesting barometer of the recession in the US. Analysts are predicting a decrease in the amount of unemployment this month (the first figure under 200K by some estimates), following a decrease also the prior month.
During NFP there is a temporary increase in market volatility, and price can move either in the direction that would seem to be indicated by the report, or it can spike and move in the complete opposite direction as well.
Ahead of the report, let’s take a look at some significant levels on the GBP/USD. Watch for breaks (and re-tests) of these levels during the spike(s) for clues as to where price is likely to go.
During the week of Aug 2, 2009, the GBP/USD had been trending down, hit the 50% weekly retracement level at 1.6839, and began moving down again. A new retracement level was reached at the 61.8& level at 1.6687 in mid-September, and price has since gone down to 138.2% at 1.5759 and is currently bouncing upward from there.
Therefore, significant levels to watch in the coming week to the upside (assuming NFP pushes us above the 1.6043 level and we find some support there) include 1.6113, 1.6332, 1.6468, and perhaps eventually 1.6578.
The present longer-term downside target remains the 161.8% level at 1.5539. However there are several levels to watch along the way, including 1.6043, 1.5946, 1.5863, and 1.5759.
This report continues to be interesting barometer of the recession in the US. Analysts are predicting a decrease in the amount of unemployment this month (the first figure under 200K by some estimates), following a decrease also the prior month.
During NFP there is a temporary increase in market volatility, and price can move either in the direction that would seem to be indicated by the report, or it can spike and move in the complete opposite direction as well.
Ahead of the report, let’s take a look at some significant levels on the GBP/USD. Watch for breaks (and re-tests) of these levels during the spike(s) for clues as to where price is likely to go.
During the week of Aug 2, 2009, the GBP/USD had been trending down, hit the 50% weekly retracement level at 1.6839, and began moving down again. A new retracement level was reached at the 61.8& level at 1.6687 in mid-September, and price has since gone down to 138.2% at 1.5759 and is currently bouncing upward from there.
Therefore, significant levels to watch in the coming week to the upside (assuming NFP pushes us above the 1.6043 level and we find some support there) include 1.6113, 1.6332, 1.6468, and perhaps eventually 1.6578.
The present longer-term downside target remains the 161.8% level at 1.5539. However there are several levels to watch along the way, including 1.6043, 1.5946, 1.5863, and 1.5759.
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Andrei Pehar, Sr. Currency Strategist, fxKnight.com
Andrei is a private fund manager, consultant to management, and a sought-after speaker and coach for professional traders and individual investors alike. At a young age he was already playing in professional chess tournaments, and went on to further hone his strategic skills through years spent studying Japanese martial arts. From both worlds, he brings with him a unique perspective to the financial markets.
His client list includes prestigious names such as UBS, Tower Asset Management (named by Bloomberg as top asset manager), Clifford Associates (investment counselors since 1915, officially acknowledged as the oldest in the United States), and several other high profile firms specializing in investment and wealth management for musical artists, sports celebrities, and other ultra high net worth individuals and trusts.
Andrei is a regular contributor to BabyPips, DailyFX, and FXStreet. He is currently working on a book which will, for the first time, introduce retail traders to institutional trading strategies and techniques. His site fxKnight.com provides free tools and strategies for professional traders and individual investors (including live chat, strategy forums, training videos, worldwide market news, and streaming ForexTV).
Click Here to view videos by fxKnight
Andrei is a private fund manager, consultant to management, and a sought-after speaker and coach for professional traders and individual investors alike. At a young age he was already playing in professional chess tournaments, and went on to further hone his strategic skills through years spent studying Japanese martial arts. From both worlds, he brings with him a unique perspective to the financial markets.
His client list includes prestigious names such as UBS, Tower Asset Management (named by Bloomberg as top asset manager), Clifford Associates (investment counselors since 1915, officially acknowledged as the oldest in the United States), and several other high profile firms specializing in investment and wealth management for musical artists, sports celebrities, and other ultra high net worth individuals and trusts.
Andrei is a regular contributor to BabyPips, DailyFX, and FXStreet. He is currently working on a book which will, for the first time, introduce retail traders to institutional trading strategies and techniques. His site fxKnight.com provides free tools and strategies for professional traders and individual investors (including live chat, strategy forums, training videos, worldwide market news, and streaming ForexTV).
Click Here to view videos by fxKnight
