The order of strength weakness remain the same
I took a snapshot of the changes in the major currencies vs each other before the employment report. It looked like this:
A NFP of 242K and +30 revision, with weaker wages has those changed looking like this:
Note the order of the strongest vs weakest stayed the exact same. The NZD and AUD remain at the top. The CAD and the GBP at the bottom. For the USD dollar, the graphs look the same. Back where we began from this snapshot taken around 7:30 AM ET.
Now the road back to where we began was not a smooth path (nor will it remain the same). The charts below show the bars for highs and lows and the ranges for the major pairs compared to 22 day averages BEFORE the report. Note the day ranges. They are all well below the average line (red line in the lower chart).
This is what it looks like now (see chart below)..
The ranges are closer to the 22 day lines. The conclusion:
1. NFP trading day is brutal. Lots of people get whipped around.
2. If there is ambiguity in the report be careful.
3. Another thing to be aware is there are so many pieces and ways to dissect this report, retail traders are at a disadvantage. The big money control.
4. You have to be quick. Technical levels do help. But you need be quick. You need to be lucky. Also price action says a lot. Someone asked in USDJPY where do you buy on a dip. I said against the close at 113.67, but not for long - meaning get out if it goes much below. The price fell below the level and raced to 113.36 in minutes without taking a breathe. You have to be quick. If a level does not work, get out. Better advise, stay in bed next month. There are lower risk days to trade and make less gambling decisions.
Are there much better days to trade. YES. There are 3 risks: Event, Liquidity and Market. Event and Liquidity risk can not be predicted or hedged. Market risk can be hedged (or protected by technical levels).
