Can somebody please explain a graph in this article:
[I](sorry I can’t post links - forum limitation)[/I]
As stated in the article “[I]the market’s reaction to the non-farm payrolls was generally positive[/I]”, so my question is why did the EUR/USD rise (EURO improved) when it should fall (DOLLAR improve)?
P.S. I am a newbie.
[QUOTE=Newbie; 519257] Can somebody please explain a graph in this article:
[I] (sorry I can’t post links - forum limitation) [/I]
As stated in the article “[I] the market’s reaction to the non-farm payrolls was generally positive [/I]”, so my question is why did the EUR/USD rise (EURO improved) when it should fall (DOLLAR improve)?
P.S. I am a newbie. [/QUOTE]
It is a bit complicate. Maybe someone will come and write down a long answer for you hopefully. I would suggest you to go again through Babypips school in the section where they talk about fundamental and sentimental, risk off and on, market correlation and where they talk about the most important countries and currencies.
In the market nothing it is valid forever. It is all depend! Is the market in expansion or is contracting? The world economy is growing or there is a crisis or are we after it? There is inflation or disinflation? Different situations bring different reactions to the same news results.
I didn’t read the article in deep so I could be wrong but in that situation I guess the good new was good for the worldwide economy and this make trader feel confidant (risk on) and they are more willing to move the money from safe even currency to more risky currency (but with higher interest rate for example)
That could be an explanation. I don’t know if it is the explanation. Unfortunately in the market everything could be right and everything could be wrong at the same time. And also it doesn’t matter if it makes sense or not… it matter only what happen…in that situation the most of the money decided to go long in the euro. Sometime is more important to guess what the other traders will do and how they will react compare to what is suppose to happen or how they are supposed to react…
Remember everything can happen at any moment. There are not rules. Only probability!
Good luck!
Fundies may not act 100% in the intended direction. You need to keep an eye on special levels. For that learn technical analysis.
Long road to go mate.
Thank you both.
Hi Newbie! Forex Gump is currently crunching some numbers so I hope you don’t mind if I put in my two cents.
While a strong USD is a reasonable reaction to a positive NFP (using a good economy=good currency analysis), also keep in mind that the U.S. is the world’s largest economy. And since one of the most important economic indicators in the world’s largest economy had just printed a significant improvement, it only makes sense for investors to be more confident of the [I]overall[/I] global economy and be comfortable with taking on more risk. This is most likely why high-yielding currencies like the euro had more demand than low-yielding currencies like the dollar.
In short, in this case the dollar’s price action was influenced more by risk appetite rather than a direct correlation to U.S. fundamentals.
Hope this helps! 
I guess I was mislead by general positive sentiment of the article so I didn’t think that a little increase in unemployment rate (that is also mentioned in the article :8:) could make such a bearish impact for USD.
Also after checking PipDiddy’s Daily Economic Commentary from that date he stated that “[I]…few analysts say that they’re still expecting the Fed to announce some stimulus measures…[/I]”.
So maybe not so unexpected bearish move for USD…