Good day forex traders.
Welcome to another review of the US Non-Farm Payroll. This economic event often brings about unexpected developments in the foreign currency exchange market and causes any EUR/USD forecast to be invalidated due to the extreme volitility.
In the previous US NFP, data suggests that despite the Euro Zone budget deficit crisis, the American employment market seems to be improving slowly. However the US Federal Reserve believes that an unemployment rate of below 8% won't be seen until at least 2013.
Looking at the EUR/USD 5 minutes chart above, we noted that the initial knee jerk reaction was to the upside. The US NFP came in at a gain of 120000 jobs. The unemployment rate fell to 8.6% and this brought about a surprise to the markets.
Despite the initial positivity, concerns regarding the Euro Zone budget deficit crisis continued to weight on the markets and risk aversion resumed. Furthermore many of the jobs gained were temporary assignments for the festive season and hence brought about uncertainty. After the initial reaction, the EUR/USD took a dived and touched below 1.34. That probably caught many traders by surprise.
Trade Safely.
