NON-FARM PAYROLLS REPORT

It’s the first trading week of the month and what comes to every trader’s mind is the NFP (Non- Farm Payroll) report which is scheduled to be released on February 5^th 2020. Last week’s Fed conference failed to provide the much needed volatility expected as the US dollar was still yet to pick a direction. While Biden’s stimulus package is still lingering, focus has been shifted to Friday’s data report. Here are a few things we can take away.

Key points:

• January NFP report is expected to post 55,000 net gain

• Unemployment rate is expected to remain stable at 6.7%

In what is expected to be a very interesting week in the market with high impact data reports coming from RBA (Reserve bank of Australia), BOE (Bank of England) and New Zealand jobless claims, Friday’s NFP report will be a cherry on the icing.

January NFP forecast is expected to be slightly higher at 55,000, a small rise from December’s disappointing report at -140,000.

The Unemployment rate is likely to remain unchanged at 6.7% for third consecutive month indicating a stagnation of economic recovery. However the US dollar has edged out stronger against all other major currency pairs this year shunning all previous volatility based events.

One currency pair we should fix our gaze on is USDCAD.

The Canadian dollar has continued to experience a tragic decline against the US dollar since Mid-January after experiencing an inexhaustible 2020. Canada which is currently on lockdown due to the coronavirus pandemic is set to also post their Job report on Friday alongside NFP report. Forecast is expected to see Employment change at -46,500 slightly better than December’s report which stood at -62,600 missing data expectations.

The Unemployment rate could rise to 8.9% as against the former which was at 8.6% in December. Currently USDCAD has maintained a bullish momentum respecting an ascending trend line on the 4hour time frame, resistance levels come up at 1.28665 and 1.29136. Should Friday’s report fail to meet up to expectation on either USD or CAD then market should be prepared to experience aggressive volatility during the US trading session.