Trading the Spike: Trade Examples
For the image please refer to the video at 0:20 and 0:54
USD spiked initially though later sold off as the NFP came in slightly below both expectations and previous at 215k vs 223k previous and expected.
For the image please refer to the video at 1:19 and 1:42
Again in September we saw the US Dollar spike higher initially before later selling off. NFP came in well below expectations here at 173k vs 220k expected and 215k previous. USD bulls were disappointed just ahead of the keenly anticipated September FOMC as some players were expecting lift-off.
For the image please refer to the video at 2:10 and 2:44
USD was sharply sold in response to the NFP release which shocked markets, printing 142k vs 203k expected and 173k previous. This release came as a blow to USD bulls ahead of the October FOMC meeting.
For the image please refer to the video at 3:10 and 3:42
In November USD bulls finally received some encouragement as the NFP came out at 271k, sharply beating the 180k expected and 142k prior, adding fuel to the fire of those expecting lift-off in 2015.
For the image please refer to the video at 4:06 and 4:31
In December the USD responded positively to a print of 211k which beat expectations of 200k but was down from the impressive 271k previous.
This is the basic strategy we advise for trading the NFP, and which will allow you to capture the initial breakout on the news release. Sticking to this strategy will allow you to be in and out quickly and it is a solid, profitable strategy to use. But there are of course ways in which you can tweak this strategy and look to stay in the move longer – and these are explained next, in the advanced version of the strategy.