Another Non-Farm Payroll Friday – April 1st 2016 Market Analysis
EUR/USD Rallies Ahead Of NFP
The Euro had some pretty straight forward trading ahead of NFP Friday. Overall we blew through our upper manipulation point and never looked back. If you read yesterday’s forex analysis you will know that I favored the downside move. Today is a perfect example of why I so often repeat the point that directional bias is NOT a reason to take an entry. As the market came into our upper manipulation point it simply blew through the level without producing a valid confirmation entry trade setup. The majority of the time this is our protection for when cycles break or we get a push in an unexpected direction. For today, I’m keeping things as simple as possible and I will be working from only major listed points. The upper level selection is pretty straight forward because there is no other level to consider. That upper point literally puts the entire short side of the market in the red. As such you have a very strong short term manipulation point that would be good for a short or a backside long depending on the setup. To the downside we really don’t have a lot of level to choose from. I opted to leave our lower level from yesterday as it was the most significant level in the area.
Pound Continues Sideways
As I talked about since the beginning of the week, the Pound completed the 3rd and final push to the upside. Since then we have gone to trading with an open directional bias as we always do at the completion of a cycle and today is no different. Especially going into NFP, I prefer to have an open directional bias as so much can change in short order. The Pound has some substantial manipulation points from which I would be happy to take a trade off of any one that produces a valid stop run and confirmation. The upper level is much like the EUR/USD upper level in that it puts the short side of the market in the red. This type of point is always a strong decision point and in trading decisions equal liquidity. To the downside we have two listed levels with the first point being very near the current price. This first lower point also qualifies as a level from which a backside short would be possible from as well as long. Should it break prior to the start of our valid trading hours, then the backside short would be the only option. The only other lower point is more of a daily reversal level as it is beyond the ADR and really the only other lower level within range.
Want to learn the bank trading strategy, join our live training room, access live member chat, as well as lifetime support? Join Us Here
Forex Market News For April 1st 2016
UK Manufacturing Production 4:30 AM Eastern: This is a big market mover as of late. This month 51.2 is the expected number. Over the last 3 releases the initial spike was always retraced back through pre-release. While the direction for the day might go in the direction of the release after a hour or two, the initial spike often gets retraced and therefore I would chase the release for those of you who do trade the news.
US NFP and Average Hourly Earnings 8:30 AM Eastern: As of late Average Hourly Earnings has been as important as the headline number. In close to 10 years of trading forex this is the first time that I have seen that consistently happen and we will see if the same holds true this month. While the initial spike will be in the direction of the headline number, the move that follows has been in the direction of Average Hourly Earnings when there is a conflict between the two. This is especially true when Earnings deviates by .2 +/- from the expected number. As this is a major game changer I would not trade a previously confirmed setup. In other words the confirmation will have to come AFTER the news in order to trade it. For those of you who are members, I forgot to address this in the daily market preview video tonight but I will make sure to do so in the Monday video or you can email me for more info. This month NFP is expected at 208K and Average Hourly Earnings is expected at .2%