Are the US pairs overreacting to the JUN NFP?

Observing how the NFP affects the US currency pairs and it looks bonkers to me atm. I’m no economist but I felt the NFP data was encouraging. Checked the economic headlines and they appear to echo similar sentiment too?

Also notice that the US market indices are all doing better since the NFP release too. Why is the USD faring so badly against the other currencies at the moment. Shouldn’t the USD be bullish right now?

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To add to this I read a bit of the summary from the pdf. Job numbers are huge +s in all the sectors covered in the report. There were so many more positive bits like:

In June, 6.2 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is down from 7.9 million in May.

Among those not in the labor force in June, 1.6 million persons were prevented from looking for work due to the pandemic. This measure is down from 2.5 million in May.

While the unemployment rate went up by 0.1% it’s so much better when you put the previous months to perspective:


There’s not always an answer to these questions.

One theory could be that since USD has been bullish all week then maybe that means the NFP had already been factored into price throughout the week, prior to it being released.

Again, I don’t know for sure, it’s just a theory.

I think I read one article explaining the same reason and somewhere. That’s probably the best explanation.

This article had an explanation too but it’s being overwritten with updated data and doesn’t contain the same contents from 5 hours back.

Economic downswing headline

It even has this to say:

Despite the fall, TD Securities, said in a research note that the dollar is not looking at the start of a significant correction.

“Beyond the initial ‘sell the fact’ reaction that appears to be underway, we think the overall tone of the report remains positive. After two consecutive ‘disappointments’, the June data offers reassurance that the US economic rebound is on track,” the Canadian bank said.

Went back to the past 3 months EUR/USD charts for NFP releases and found something interesting. MAY & JUN had massive spike and a possible correction 3-5 days later.



But no change in APR

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Hey Darth

Yeah boy, the market is changing. I’ve had my eye on this all day, since NFP started.

Meaning, the USD had been on a bull run for a while now.

And the USD, on the lead up to the report (these past few days), was rising even more.

And it’s only in the last couple hours that now I’ve seen a MAJOR sentiment change. The USD is going down. And I think quite hard. But the thing of it is, is that it wasn’t a direct correlation to the jobs report. It just happened to be later on in the day (like right now) that the Dollar is tumbling.

I think today (NFP Friday) was a good catalyst for the move to happen, that’s all.

I think we got some serious risk-on going on. AUD, NZD, CAD all moving high. All else going down.

I think it would be a mistake to try to correlate what’s happening in the market to the NFP report. There’s so many things going on, you couldn’t possibly know exactly what all the reasons are.

Look. It is important to know why things are moving (if it’s possible to know all that).
But what’s more important is knowing that things are moving period. Prices are telling the story. And the analysts are trying to figure out why.

They don’t always get the reasons correct. But the market always does.
So just follow what’s going on in the market.

Check this out. Today, I took a snap shot of what the market was doing. I wanted to see some kind of progression, and where it was heading.

Just pay attention to the % in the middle. Going down. That’s how they are faring for the day. I got the time stamp on the top right corner. That’s 5am this morning. And NFP starts at 8:30am (well, this is 10 minutes late due to coming from Central Standard Time). But you should be able to see how the USD has been doing today. Right there it’s standing at .54% higher, for the day so far.

2021-07-02_08-30-02 2021-07-02_08-40-00 2021-07-02_08-43-04 2021-07-02_09-10-31 2021-07-02_10-55-02
This is 2 hours after the report came out. The USD is only -1.62% on the day. That’s nothing. No changes are happening so far. Keep your eye on that.

And I just went and took the last pic now. This is the latest.
Ok. So. Looks like the bleeding stopped.
But you should be able to see that the USD did fall. And I also showed you that it wasn’t a direct result right after the report.
And btw…that % is nothing but all of the 7 USD pairs %'s added up together. It’s the sum total of all it’s parts. It gives you a birds eye view of what’s happening with the USD.

So, we have about one more hour before the market closes for the week.
It’ll probably get slow from here on out.

Well Darth…
Thanks for opening up the post. It’s interesting stuff.
And be careful of what you’re listening to (analysts). All they’re trying to do is explain what the market is doing. Well, when you have the market right at your finger tips, you should be able to see for yourself and make your own judgements.

I mean, does it matter anyway? What the reasons are?

Sure, it would be awesome to know. But as Matt tried to explain, and I agree, that sometimes there’s not always an answer to these questions.

What’s most important is to know that it is moving.

Well then, trade accordingly.


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i`ve been trading about 2-3 years, rarely look at the us pairs these days, good decision

Mike, much thanks for your insight. That observation you made about the ~2 hour continuation got me to go back and look at the charts a bit differently. Here’s what I found in the 5 min charts:

Please note that times are GMT +2, hence:1530/1955 are 0830/1255 EST

  • The peak of the first spike terminated at approximately 0920 EST, followed by a consolidation and resumption of second spike at 1255 EST
  • Despite the near equal movement of price action, for 4 pairs, there’s noticeably a larger tick volume in the first spike + consolidation when compared to the second spike
  • The price action also oscillated in the first portion, possibly corrections from the very violent move up, as opposed to the more gradual climb of the 2nd portion.

Observations listed for each chart:








Here’s how price moved between the 1st portion and 2nd portion
NFP half move measures
While you observed a more radical price movement after the 2nd stage I found most currencies exhibited a greater change in the first half, but not very significant though. Then again the two largest pairs had more significant 2nd half movements. Do your numbers have a higher weighting for the larger pairs? That’d explain the price skew toward the 2nd half.

I was stumped Mike. I hoped to find something in the news that could tell me why I was wrong about my interpretation of the NFP data and I couldn’t find anything satisfactory. I still think the market overreacted though and that it will correct itself in the next 3-5 days like it did in the previous 2 months. Then again, I’m still a huge newbie and I could be way off the mark. All part of the learning process :slight_smile:

kind regards, Dims

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Good work Dims

We’re gonna just have to remember these moves today. And when the market opens and gets rolling next week, it will slowly become more clearer.

I kind of think the market has changed trends. Daily trends.
But we need more days to go by to see if that is true.
Now, if it’s not true, then the market will continue on with a long USD daily bias. Cause that’s what’s been happening lately.
My context here is on the daily time frames (total movements across the course of a complete day).
I believe that gives you the truest measure of where a currency wants to go in.

We’ll just have to see.



Its a market driver so its main purpose is to seek liquidity. NFPs and FOMCs allow them to push price where they want it to go

Found a great video describing why the NFP numbers may not be as positive as the stock markets have taken it so far.

Another one that goes onto speculate why the Fed won’t stop Quantative Easing. If I understood these videos right then the currency markets were right to reign in on the recent rise of the USD. How the markets react to the FOMC minutes today should be really interesting.