The Non Farm Payrolls are upon us again this Friday, and everyone is wandering if the
Rally in the USD can continue.
In my opinion the downside for the USD is much stronger than the upside, meaning
That the Dollar would need a fantastic result in order to keep rising against other major
Currencies.
Since March, the number of new jobs created has been hovering around the 200k, with two breakout months in May and July where the numbers were closer to 300k.
Lets take a look at the USD/JPY on the 3rd of July
Exceptionally strong numbers, created a big spike in the following few hours, but even
Then we saw a correction in the last few hours of the day.
Now lets take a look at last month’s numbers, which came in over the important 200k threshold.
Even after a relatively strong number we can see a much bigger drop than we saw
In the previous month’s gains.
This shows us, that in the short term, its all about the markets expectancy and if everyone is
Expecting a strong result, gains will be limited.
For the Dollar to continue with its current rally we need to see 300k new jobs, if that happens
We can expect the USD/JPY to approach the 106 level.
In case we get less than 230k, I expect the momentum to fizzle, and we should be seeing a drop in the USD.
In conclusion the Dollar has a lot more to lose than to gain this Friday, think about that
When you place your trades.
