FXstreet.com Live Sessions Archives: Non-Farm Payrolls Release Live Coverage

Non-farm Payrolls Live Coverage with Nick Nasad

(06/05/2009)

1:14

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FXstreet.com: Good morning, good afternoon and good evening to everyone all over the world. Today's U.S. NFP Live Coverage will start in 5 minutes. I am really happy to introduce Nick Nasad who is going to take part in this live event today as a co-presenter. He will be giving us a direct picture for the market status.

1:15

FXstreet.com: Nick Nasad is a currency market analyst with CMS Forex for the last 3 years. He closely monitors fundamental releases and reports their results and provides commentary to the company's clients through CMS Forex's interactive economic calendar Forex Capsule and through daily Forex market video recaps. He has also written extensive educational material on using technical analysis in trading Forex.

1:16	Nick Nasad - CMS: Hello everyone, and thank you for having me on once again fxstreet!

1:16

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1:17	What do you anticipate the outcome of NFP? Better than expected and bullish for the USD ( 57% ) Better than expected but bearish for the USD ( 14% ) Worse than expected and bearish for the USD ( 5% ) Worse than expected but bullish for the USD ( 24% ) Not much impact on the USD ( 0% )

1:17	[Comment From Sunil] Good morning Nick

1:17	[Comment From sumit kumar ram] hello

1:17	Nick Nasad - CMS: hello all, so we come into today's nonfarm payroll with mild action overnight as traders await the big release.

1:18	Nick Nasad - CMS: The one currency making noise is the Pound, which is being pressured by turmoil within the Gordon Brown administration

1:18	Nick Nasad - CMS: the GBP/USD his a low of 1.6020, though it clawed back most of those losses.

1:19	Nick Nasad - CMS: For today's jobs data, expectations are for around 520K to be shed by the US economy

1:19	Nick Nasad - CMS: thats a high number, but much lower than the results we saw early in the first quarter, where January's figure was down something like 741K.

1:20	Nick Nasad - CMS: recently, positive US data has been correlated with increased risk appetite which has weakened the dollar, and a better than expected print would be the logical way to think about today's event.

1:20

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1:21	Nick Nasad - CMS: however, some of that connection has faded recently, mainly as the run-up against the dollar may be overextended compared to the growth and earnings forecasts for the near future.

1:21	Nick Nasad - CMS: The Dollar is trading slightly higher against the Yen and Loonie overnight, while the EUR/USD is treading water.

1:22	Nick Nasad - CMS: let me get to some questions now as we have about 8 minutes before the release.

1:22	[Comment From Naz] How do you think GBP will react after the ?

1:23	Nick Nasad - CMS: The Pound is dealing with its own factors like i mentioned above, and seems to have found support after sliding almost 650 pips since Wed. high.

1:23	Nick Nasad - CMS: connecting the recent highs since that peak, we set up a short term line of resistance that the Pound seems eager to test

1:23	[Comment From miqglen] Hi Nick, Your opinion if NFP come as expected or better and unemployment rate come worst, what next for USD?

1:24	Nick Nasad - CMS: thats a very good question, as that result can have contradictory forces. I think ahigher unemployment rate will bring to the front the problem that all the major countries will have once any recovery starts, and that is high unemployment which will stifle consumer spending.

1:25	Nick Nasad - CMS: following our recent rallies against the greenback in March and April, it seems that investors and traders this week took time to really think about wether things are as good as equity markets are making them out to be..

1:26	Nick Nasad - CMS: still, a better than expected job loss figure will support risk appetite with the unemployment rate a more medium term indicator

1:26	[Comment From mike] hello everyone!! was Canada expecting those negative employment numbers?Is this a limit for the loonie strength?

1:27	Nick Nasad - CMS: though the job loss data in Canada was higher than expected, the fact that it was negative was not a surprise. The Loonie is one of those currencies that has rallied very strongly teh past month, and seems to have made a double bottom at the 1.08 level.

1:27	FXstreet.com: CMS Forex, today’s Sponsor also produces expert analysis, market research and daily market news coverage with videos and reports. Browse the following URLs to learn and take profit from their expertise.

1:27	FXstreet.com: CMS General Research page

1:27	FXstreet.com: Daily video about the main market news

1:27	FXstreet.com: Expert Analysis of Today's Market

1:27	FXstreet.com: Forex Capsule - Weekly Chart Analysis and calendar for the week ahead

1:27	Nick Nasad - CMS: it retested support turned resistance at 1.1150, so those two levels can form the basis for a sideways channel if consolidation is called for in this pair.

1:27	[Comment From Dusan] Hello Nick, NFP report is not such a big market moover anymore as it was some time ago. It is like lotery draw for FX traders. What is your opionion today - will EUR/USD pair go up or down after toaday NFP data release?

1:28	Nick Nasad - CMS: though its not completely a crap shoot as better numbers in the US tended to favor risk appetite and therefore boost the EUR/USD

1:29	Nick Nasad - CMS: that would be my expectation going into the release again. however, the markets seem ready for some pullback in favor of greenback strength..

1:30	Nick Nasad - CMS: Euro is jumping already

1:30	Nick Nasad - CMS: wow.. -345K

1:31	Nick Nasad - CMS: that should help risk appetite and the initial reaction is towards risk appetite and higher yielders moving higher.

1:31	FXstreet.com: Actual -325K vs Forecast -520K . Unemployment rate 9.4%

1:31	Nick Nasad - CMS: smallest drop in payroll since sept. 08

1:32	Nick Nasad - CMS: this is a very good sign for the US labor market, showing that the recession is easing.

1:32	FXstreet.com: Actual -345K vs Forecast -520K . Unemployment rate 9.4%

1:32	[Comment From mrcable] continued usd verbal intervention will dampen the usd selloff today, if it will be the case.

1:32	[Comment From Alfredo] -345K will be a big bust for EUR ?

1:33	Nick Nasad - CMS: greenback is weakening, except against the yen

1:33	Nick Nasad - CMS: as this number will push the theme that things are getting better, which puts pressure on teh greenback as its safe haven status is shrinking by the day.

1:34	[Comment From zaphy] hello mr cable! no chance for 'come on cable, tank' today :)

1:34	Nick Nasad - CMS: the Pound broke up through the short term downward sloping supportline,

1:35	Nick Nasad - CMS: EUR/USD may want to retest its high from Wed. we cleared all the other restistnace levels just now.

1:35	Nick Nasad - CMS: ok, the initial wave of buying higher yielders has paused..

1:35	[Comment From Darren] what level should we be seeing for eurusd today?

1:36	Nick Nasad - CMS: 1.43 if not 1.4330, though right now we are seeing a pause as traders are profit taking after the initial jump.

1:38	Nick Nasad - CMS: in a short time frame last 10 minutes, plot some fibo levels and look for a correction to 23.6% - we are there now. 38.2% is better.

1:38	[Comment From Anthony] Any opinion on whether GBP/JPY could break 160.00? If so, what is next major area of resistance?

1:39

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1:40	Nick Nasad - CMS: we are still correcting to the initial knee jerk reaction, but looks like the bears may be losing steam and we can have a second wave now of higher yielder strength.

1:41	Nick Nasad - CMS: but the lack of follow in the EUR/USD so far following such a good number is a cause for concern in that pair.

1:41	Nick Nasad - CMS: in other pairs, the USD/JPY is back at its high,

1:42	Nick Nasad - CMS: the yen seems to be coming under pressure, taking a look at the EUR/JPY, for longer term traders, we had a strong break of resistance

1:43	[Comment From Guest] though yen has broken 97.25 region, do u think it can stay above that level for today's close???

1:43	Nick Nasad - CMS: the reaction for stocks in the US should be positive, which should support the greenback against the Yen

1:44	Nick Nasad - CMS: we had a very nice consolidation pattern in the USD/JPy earlier in the week that was broken on the upside, so this move above the level you mention has merit

1:44	Nick Nasad - CMS: we have retraced 50% of the EUR/USD's initial move..

1:45	[Comment From Mike] Where do you see USD/CHF going from here?.

1:46	Nick Nasad - CMS: the initial move in this pair was rejected rather strongly, so it doesn't seem that the swissy will be gaining here.

1:46	[Comment From jaya] 'Any opinion on whether GBP/JPY could break 160.00? If so, what is next major area of resistance? '

1:47	Nick Nasad - CMS: the Pound will continue to be pressured as long as the political situation there is uncertain. the pair may have further consolidation to go through, below the 160 level.

1:48	Nick Nasad - CMS: well, the correlation of good news from the US weakening the greenback seems to be gone and today's data is giving the dollar strength

1:48	Nick Nasad - CMS: that was a huge whipsaw

1:50	Nick Nasad - CMS: in the EUR/USD. that shows you the importance of having a trading plan and several confirmations before entering a trade. its enticing to trade short time frames on fundamental releases, but it can be much riskier.

1:51	[Comment From Dusan] It seems that EUR/USD pair follows the many times proven way at NFP release day. The first move - today up - is usually in the oposite direction, that the rest of sesion - it would mean today EUR/USD down. What is your opinion?

1:51

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1:52	Nick Nasad - CMS: yes, seems like a case of a clear out action, where traders and bigger instuitutions pump up the price, but then with orders in teh 1.4250 range on the sell side, we have had a complete reversal.

1:52	[Comment From Guest] can you give your opinion on GBP/USD ?

1:53	Nick Nasad - CMS: After breaking through short term resistance the pair has come back down into its range and we have a a very strong move towards dollar strength.

1:53

Nick Nasad - CMS: the data supports the theme that the US economy may not only be seeing its recession easing, but that if the labor market begins to recover, the overall economy may be on its way to recovery as well. that can have very good implications for 2nd quarter and 3rd quarter growth numbers.

1:53	[Comment From ashish patel] Shall not USD become stronger now based on good news coming out from US, where as Europe & others are still have not bottomed out in recession? Also, USD have corrected the strength aquired becaused of safe heaven now. What is your view on this.

1:54	Nick Nasad - CMS: that is very good analysis ashish, we are seeing that coming through in the price action as the greenback is finally seeing strength following a strong release.

1:54	[Comment From Anthony] I suppose the reasoning behind the moves, is that the employment report can give fuel to the arguement of the US recovering first.

1:55	Nick Nasad - CMS: exactly. though if this is a one day reaction, or if it will persist into next week will be something to watch.

1:56	[Comment From zaphy] What can be the factors for such a dramatic improvement in NFP? Surely, the economy has not imroved that much to retain ~200K?

1:56	Nick Nasad - CMS: from Dow Jones News: "The Labor Dept.'s estimate of the net change in jobs associated with business starts and closings added 220,000 jobs in May, says Andrew Brenner of MF Global. That gain would be a big reason for the smaller-than-expected loss of overall jobs in May."

1:58	[Comment From Sagheer] an i hold USD/CAD possition

1:59	Nick Nasad - CMS: the USD/CAD had a very strong buy signal following its double bottom earlier in teh week, whose neckline was tested as support as yesterday's low.. this is one pair where there is alot of room for a pullback from the steep decent it has seen the past two months

2:00	Nick Nasad - CMS: it seems that traders never really retested the 1.15 level after it was broken May 20th, and if greenback strength continues into next week, we can see the greenback retest that level.

2:00	Nick Nasad - CMS: now, a recovery in the US will help other economies as well, and the ones most likely to benefit will be commodity currencies like the Loonie and Aussie, so that is one counter factor to keep in mind.

2:01	[Comment From zaphy] In that case, this may well be a temporary improvement, and we'll be getting 500K next month again?

2:01	Nick Nasad - CMS: zaphy, its very wise to not take one month of data as the start of a new trend, and the unemployment rate continues to climb

2:02	Nick Nasad - CMS: so, the reaction is very strong today as traders digest its meeting, but its important to keep an eye on how the fundamentals shape the next month.

2:02	[Comment From ray smith] now who said non farm not a major mover anymore? lol

2:03	[Comment From Guest] can i go for long (sell) on GBP/USD ?

2:04	Nick Nasad - CMS: i dont want to tell you to buy or sell, as you should have a trading system in place that gives you the signals you need, one thing can say is the almost 200 pip slide since we hit 1.6240 is now coming up against our support from overnight.

2:05	Nick Nasad - CMS: theres alot of trading still to go today, but we may have priced in the reaction on the greenback side by now. though if we slip to that support it will be very interesting to see what will happen.

2:05	[Comment From Vikas] Do you expect the Aussie to keep up the steady climb it has shown iver the past 14 weeks?

2:06	Nick Nasad - CMS: the aussie's rally has been based on fundamentals moreso than the Euro's which was based on greenback weakness.. growth numbers for australia for the 1st quarter were positive, economies that it depends on to export like China are recovering and commodity prices are going up.

2:07	Nick Nasad - CMS: all of those factors support aussie strength, but what started this week may be the beginning of a correction to that rally you mention

2:07	[Comment From ray smith] might break into 1.3900 for euro

2:07	[Comment From ray smith] I look for a retracement before doing that

2:08	[Comment From Dr. Rob] Hi Nick and welcome. Where do you think the true value of cable is, current political problem notwithdtanding? Is it around 1.68, 1.74 or maybe even higher around 2.0 as in the time just before the credit crunch crisis?

2:09

Nick Nasad - CMS: in the more medium term, the cable's rise has also had fundamental factors behind it, mainly what looks like improvement in that country's housing sector and just this past month we saw services PMI move back to expansionary territory. of course alot of that growth is fueled by the quantitative easing the bank is doing.

2:10	Nick Nasad - CMS: the pressures on the greenback however are very real, as its creditworthiness and inflation concerns will dog it for the medium term. therfore the cable as you say has more room to climb, though we seem to be starting a correction to the rally we have seen since march.

2:11	Nick Nasad - CMS: though i dont think we are going to come back to the 2:1 level anytime soon, i think the true value is somewhere higher than our recent high of 1.66. In comparison the the Euro-zone the economy seems to be moving out of its recession quicker.

2:12	[Comment From ray smith] Well I made my money today. Have a great day, weekend and happy trading

2:12	Nick Nasad - CMS: glad to hear it, you too

2:12	[Comment From nagalla] Comments from Fed's Lockhart being credited for the USD come-back, he said Fed should not wait too long to tighten monetary policy. if so what will happen next week for EUR and GBP?

2:14

Nick Nasad - CMS: i think fed officials need to pay lip service to help maintain a stronger dollar. the only way to tighten monetary policy is if the economy was on its way to recovery., raising rates can choke off credit and investment just as things are rebounding. "should not wait too long" is relative, but tehre are concerns of stoking inflation if they are kept too low for too long so its a smart thing to say..

2:15	Nick Nasad - CMS: if that theme catches on, because signs point to a faster than expected recovery, the greenback woudl be supported.

2:15	[Comment From arfan] do u think GBP/USD bearish still continue nick ?

2:16	FXstreet.com: Sorry guys. we have just 15 minutes left.. Do not miss a chance to ask Nick!

2:17	Nick Nasad - CMS: the 1.60 level is strong support, but if you look at a daily view, we have three red candles in a row, and the run up since march has room to fall

2:17	Nick Nasad - CMS: the EUR/USD has foudn support from yesterday's low.

2:17	[Comment From mike] do you think we have started a short term dollar's momentum that could last few days,or is this only a reaction to the news?

2:18	Nick Nasad - CMS: there are some signs in pairs like the USD/JPY and USD/CAD adn now the GBP/USD that that could be the case.

2:18

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2:19	Nick Nasad - CMS: that we can have a more sustained greenback rally, however after the short term traders have there way in today's trading, we'll see what the market reaction will be from more longer term traders following teh weekend.

2:19	[Comment From taiyo] but i tout wen rate is bad us sould be pressured

2:20	Nick Nasad - CMS: if u are referring to the unemployment rate, today's data is more focused on the actual job losses figure which was exepcted to be around -520K but turned out to be -345K.. thats a much better than expected release, and today is supporting the greenback.

2:21	Nick Nasad - CMS: im getting alot of questions and im sorry if i dont get to answer yours,

2:21	Nick Nasad - CMS: i have time for several more.. but i just wanted to say thank you for you active participation

2:21	Nick Nasad - CMS: even if i didnt choose your particular question

2:21	[Comment From Redstar] EUR is going down real fast

2:22	FXstreet.com: NFPs Actual -345K vs Forecast -520K . Unemployment rate 9.4%

2:22	Nick Nasad - CMS: yes, the support from yesterday did not hold at all, and we are now at a new weekly low

2:22	[Comment From ashish patel] if we see USD strengh due to faster then expected recovery, then what is view on USD JPY pair? can it break 100 level.?

2:22	[Comment From Redstar] do you fancy JPY to test 100?

2:23	Nick Nasad - CMS: yes, i think since we bounced off the 94 level a couple of weeks ago, the relationship we all grew to love about equities and the USD/JPY seems to have returned. therefore, better news for the US economy, and thereby stocks is helping the USD

2:24	Nick Nasad - CMS: today's rally stalled at the trendline connecting the highs from April 6th and May 8th

2:24	Nick Nasad - CMS: if we hav a break of that, we shoudl see teh pair move to close to the 100 level.

2:24	[Comment From Redstar] EUR has broken yesterday's support... what's the new support level?

2:26	Nick Nasad - CMS: 1.40 is a 61.8% retracement of the rally from 1.38 to 1.433 so lets see if we get there today. in a slightly longer view, the 1.3850 area was our low from last week,

2:26	[Comment From arfan] which one that have better economic condition recently. US, UK or EU nick?

2:27

Nick Nasad - CMS: i would say a couple of months ago it was the UK, though now the US is coming up close behind. that is of course because the central banks have acted aggressively to lower rates and pump money into the economy. the ECB has been slower to react, but it has a more complicated coordination effort as it has to take into account many countries viewpoints.

2:28	Nick Nasad - CMS: http://www.cmsfx.com/en/forex-resources/market-analysis/forex-capsule/

2:28	Nick Nasad - CMS: if you go to our Forex Capsule, you can click on any country and get all of their releases in one place..

2:28	Nick Nasad - CMS: for instance here is the UK, http://www.cmsfx.com/en/forex-resources/market-analysis/country-profile/united-kingdom/

2:28	FXstreet.com: it's time to wrap up the live coverage. Sorry guys!

2:29	Nick Nasad - CMS: you can examine for yourself how each country is doing..

2:29	Nick Nasad - CMS: ok guys and gals, its been a pleasure taking your questions and its definetly an exciting day in the markets

2:30	FXstreet.com: Thank you Nick for the fantasitc market analysis. You are one of the bests!. We really appreciate you. Thank you!

2:30	Nick Nasad - CMS: so, keep an eye on US equities and the response there, and whether risk appetite in equities will materialize and how that will affect the greenback strength.

2:31

Nick Nasad - CMS: today's data can really shift the debate to traders eyeing a quicker than expected recovery in the US, which will support the greenback in the week's to come. of course we need more corrobarting data, and we have to see what happens next month with payrolls.. in the meantime check the weekly jobless claims figures for further improvement in the US labor market.

2:31	FXstreet.com: And thank you eveyone who has joined today!... Hope you have had a good time with us.

2:31	[Comment From Redstar] Thank you Nick

2:31	[Comment From arfan] thanks nick its really help :)

2:32	Nick Nasad - CMS: if you enjoy our analysis, take the time to subscribe to our daily video recap RSS feed

2:33	FXstreet.com: Thank you Nick and everyone! I hope to see you all again here in the live coverage! See you! Have a nice weekend, adios!

2:33	FXstreet.com: I would like to specially thank CMS Forex, today’s sponsor, for their support. Open a live account with CMS with a low minimum initial deposit of $200 now. Use the following links to follow up about today’s main market news.