Trading the NFP: Your Cheat-Sheet

How will you trade the currency markets heading into, and in the wake of, the release of the all-important US Non-Farm Payrolls due for released today?

“To simplify analysis of the market’s reaction function, it helps to boil things down to a limited set of outcomes. Of course, reality is more complicated than a handful of scenarios, but looking at a few key potential outcomes helps to structure thought going in to a complex event with a myriad of potential outcomes,” says Greg Anderson at BMO Capital.

With that in mind, the below image, courtesy of BMO, below gives my view of what would constitute strong, weak and neutral for the US Employment report.

“Also shown are my guesstimates of approximate moves in the various pairs depending on the scenario,” says Anderson.

Click the image to enlarge.

For more insights see our more detailed NFP analysis.