The NFP Effect

Article by ForexStopHunters

I have been around for awhile as many of you
know by now. I go all the way back to when I was a runner on the Floor of The
Chicago Mercantile Exchange in 1975 when they traded IMM Currency Futures on a
Chalkboard,TRUE. When I became a broker the most anticipated market moving Data
Point was the weekly money supply numbers released on Fridays like the NFP is
today once a month.

We've included a chart of the EURUSD to
demonstrate how significant this Data Point is creating significant reversals
with lasting consequences in both time and price. The two significant DXY lows
in in Dec 2009 and November 2010 exemplify this this as does the June 4th 2010
NFP set the low in EURUSD in the 1.18 range. Politicians are saying now
"it's all about JOBS" without being aware of those numbers being the
foundation for significant price moves in the Stock of the U.S. and other countries, for our
currency is the stock price of nations.

As traders we can be laser focused on these
reports as inflection points for possible reversals (see chart) without having
massive exposure into the number because that is not trading it is like a
Roulette black or red Bet. I prefer to react to the number than to guess on
initial reactions where stops are picked off and air pockets of illiquidity exist.
As forcasted in earlier blogs, posts, video's and webinars I have been looking
for this phase of USD weakness to terminate pointing towards a W.D. Gann date
of Feb 2nd. 

The risk aversion pairs in particular USDCHF
with USDJPY and USDCAD bringing up the rear have performed well and EURUSD has
given back much of it's weekly gains in the last 24 hours. Perhaps this action
is a precursor to the NFP and weekly closes are important in my work so by
Friday's close we will witness perhaps another inflection point and will add
another RED Arrow on this chart.

Good Hunting

Click image to enlarge