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Non-Farm Payrolls exceeded expectations and fell by only 54K, nearly half of early expectations. The unemployment rate rose from 9.5% to 9.6% as expected. The initial reaction was a drop of EUR/USD but it immediately rose back up. USD/JPY is going in one direction – up.

The important part of the release was the the private sector figure. Here, a gain of 67,00 was published, also significantly better than 40,000 that was predicted. And there was more good news:

A revision of July’s figure showed that Non-Farm Payrolls fell by only 54K instead of 131K initially reported. Also the private sector’s number was revised in July from 71K to 107K. All the numbers are significantly better than expected.

EUR/USD traded around 1.2840 before the release. It then fell to 1.2810, leaped to 1.2875 and fell back again. It’s currently looking for a direction. We could see a relief rally on EUR/USD and stocks.

The Japanese yen, that has a low yield and is also a “safe haven” currency fell sharply. USD/JPY jumped from 84.40 to 85.20 after the release – no choppy trading – just one direction – up, according to scenario #2 in the Non-Farm Payrolls preview.

As written in the  preview, this publication of Non-Farm Payrolls is a test for the fears of a double-dip recession. Did this calm the markets? As always, analysts will debate over this for some time. A recovery in jobs is the key to recovery.

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