Hi all,
Am scratching my head wondering why USD falls when NFP released with positive numbers also other US eco releases reads positive as well but looking at Forex USD just dipped at the release… Why’s that? Or am I completely wrong?
Some people will have been buyers ahead of the news, expecting it to be good. Now the good news has come out, they bank their profits and send that money off on another mission.
And that’s always the problem with trying to understand any of this. You have no idea how much is already factored into a price. Stick with the technicals and try to avoid the fundamentals.
3 Likes
Trading the NFP is a lottery and that’s why many traders don’t bother with it.
1 Like
I try to avoid it when I a have short-term trades running. Even if you get the post-NFPR direction right, the wild volatility can take out stops and leave you in cash when you should have seen a profit. Yes, it is just a lottery.
As a newbiw I find it surprising how much NFP does affect the market… My XAUUSD got blown away within a minute after NFP and it’s gone up 100+ points in an hour, engulfing last day’s candle with ease. The same goes NZDUSD it just skyrocketted… As tommor and cigar mentioned people already priced in pre-NFP and massive sell off triggered tons of stops
I wonder if anyone has tried being flat going into NFP but set up buys and shorts, say,
1 Average Daily Range from the previous days close? You’d still have to use stops maybe
another 1/2 ADR above/below that but wondering if that would work.
This sort of market reaction happens from time to time, due to various reasons. Generally, NFP is one of the major indicators for the US, but it is combined with other fundamentals in order to get a full picture. Higher wages means higher spending, leading to higher inflation
To be truthful about it, you cannot win. Sometimes USD falls with positive numbers (like you observed) most times the market behaves normally and USD will rise with positive numbers.
The next step for a sentient being like you is to find out what went wrong or what could be the cause. I have been in that situation and I hear things like “Banks/people buying into the price before the news” and a lot of other explanations that don’t seem to make sense to me.
Unfortunately, I have given up in trying to understand why and how things like this happen so I just work with what I see. If NFP has positive numbers, I trade accordingly. If I am on the right side of the market, I let it reach my TP, but if the market acts in the opposite direction I sucker up and cut my losses.
I think you should do the same if you are unable to figure out a solution.
Here’s another USD release with positive numbers. The gopher (USDJPY) should have rallied after it’s release at 1:30 pm
But…
and someone will tell me “they bought into the news bla bla bla”
These guys now use false data to trick retail traders and take their money. If you are not going to release accurate numbers, why bother?
Things like this makes fundamentals a sham in its entirety and it is why some traders rather follow technical analysis and forget about the FAKE NEWS.
UPDATE: Look at other USD pairs at same time period and watch them do the opposite. FAKE NEWS IS BAD FOR YOUR ACCOUNT.
Nobody’s releasing false data, they’re not trying to rob private retail traders, this is not fake news. We are not the targets of the hunters in the game. But if us fleas get in front of the hunters’ elephant guns we’re going to get blasted to pieces of course.
1 Like
It is FAKE NEWS.
This is like a traffic light on GREEN yet you get a ticket for running the light