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On the first Friday after the month ends, two important news release by Bureau of Labor Statistics. One is unemployment rate and the other one (the more or perhaps the most important one) is non-farm payrolls (NFP). NFP accounts for a majority of overall economic activity and show changes in the number of employed people during the previous month, excluding the farming industry. Unemployment rate is an important signal of overall economic health and it is Percentage of the total work force that is unemployed. In this article, I try to show the influence of these indicator on USD index return based on portfolio analysis.
Portfolio analysis,
portfolio analysis means that NFP & unemployment rate data are sorted into 10 portfolios from lowest to highest separately and USD index returns of each portfolio are examined for evidence of anomaly;. Portfolio analysis intuitively, clearly reflects the picture of how returns vary with the characteristic variable; however, with this method it is difficult to conduct multivariate tests and difficult to test the functional form. In the picture below, basket is NFP or unemployment rate and eggs are USD index return.
In this researc…
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MaziarE avatar
MaziarE 22 May

thanks dears.

AngleRMS avatar
AngleRMS 29 May


Yuliya_N avatar
Yuliya_N 30 May

thanks, it was interesting to read

Chilli avatar
Chilli 8 June

very good


you are the winner! afarin

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Many traders avoid trading on days of important news. It is true that the market in these times is much more volatile, making it really unpredictable. But is that the best is not trade these days or try to take advantage of these features of the day’s news. In this article we can see a strategy to take advantage of volatility in periods of news.

The News

The forex market can be very volatile in the short term. Although the currency pairs follow sometimes clear trends over long periods of time, but in the intraday the currencies react very quickly to the unfolding news. It is essential to know what news has more impact and sources following to profit in forex world.
In this picture we can see the Dukascopy Economic Calendar [1]
- What news is most important in forex trading?
Not all the news has the same impact, some are followed more closely than others simply because they have more influence on the appreciation of some currencies against the other. In general we can say that the main economic indicators are always important:
  1. Gross domestic product (GDP) and its rate of quarterly or annual growth;
  2. Inflation rate;
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margarida avatar
margarida 10 Nov.

Gostei! Como sugestão, não te focares tanto num só tipo de notícia, mas ser mais abrangente.

miguelmatos avatar

I used to avoid news periods but I like your article point of view.

zarina avatar
zarina 13 Nov.

Спасибо , очень полезный материал !

F1Rio avatar
F1Rio 22 Nov.

Great article

brilliant avatar
brilliant 24 Nov.

well illustrated good article

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Before the RBA Rate Statement

The Friday before the RBA was a tough day for fundamental analyst traders who solely based their trading on the NFP report that came in at 151K, 21K below expectation. The AUD/USD was only bullish in the first five minutes and then turned around to the downside to the 0.74500 psychological support level maintained earlier in the European Session.
Chart 1: AUD/USD 5MIN
Some of the explanations of the behavior of the USD included;
  • The huge impact from the Jackson Hole Symposium that provided a huge boost to the dollar
  • The new home sales and durable goods report that beat their expectation also provided a boost to the USD though to a less extent
  • Finally, Janet Yellen’s expectations of the rate hike based on the speech delivered Jackson Hole were her conclusion about the US economy was
    the case for an increase in the federal funds rate has strengthened in recent months.

In Australia, we saw the AUD show strength against the USD with the start Asian session on Tuesday ahead of the RBA. All traders seemed confident that the rate would be maintained since it had been cut by RBA in the month earlier. Furthermore, the reports of the private capital expenditure…
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FXRabbit avatar
FXRabbit 15 Sep.

Good article!


i can't see the charts ...??

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This article contains a set of rules about one of the most profitable tested strategies when the Non Farm Payroll is released.The U.S. Non-Farm payroll (NFP) is one of the most notable macro-economic releases in the US. The NFP measures the change in the number of people employed during the previous month, not considering the farming industry, government employees, private household and non-profit organizations employees. Job creation is correlated with the consumer spending, which accounts for the majority of economic activity. The NFP influence is usually notably larger than that caused by any other economic print in the Foreign exchange market. The release of the NFP generally occurs on the first Friday of every month at 8:30 a.m. EST.An higher than expected reading should be considered as positive/bullish for the USD, and a lower than expected reading should be taken as negative/bearish. As a result, many speculators, scalpers, traders, fund investors try to anticipate the NFP print and consequently could become very relevant the variance of the pair. The variance measures how far a set of numbers is spread out. A small variance indicates that the data points (pri…
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foreignexchange avatar

La strategia viene testata su 20 Pips a release. 4.5 x  20 Pips = 900  USD se intendi questo hai ragione avrei dovuto cambiare i volumi che ho utilizzato quelli con i quali lavoro ... grazie

foreignexchange avatar

isomere  Thanks for the revision, the trading volume is 4.5 x and not 3 x . The mistakes is that for job I traded at 4.5  volume. Sorry again.
It could be considered that the relevant things of the strategy is the 20 Pips of profit in 10 NFP/10 NFP and the volume is related to the personal money management.
Thanks a lot @isomere 

jbmaverick avatar

I'm surprised to see virtually no spike at all in the opposite direction from the direction the market takes off substantially in after the announcement, and I wonder how accurate that is.  I'd be worried about - when the move is up, for example - having my sell-stop filled on a momentary drop in the offer price.

Jasjas avatar
Jasjas 16 Mar.


Jasjas avatar
Jasjas 16 Mar.

Hello Foreignexchange!
Are you still using this strategy?
If yes, how are the results?

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Although the past trading week provided us with some crazy moves, it did a lot more than that. The EUR/USD formed a nice range, a break of which should produce a sustained move either up or down. The pair closed the week at 1.3003, practically unchanged, down only 8 Pips from the previous week’s close. Please look at the 4 Hour chart below. The yellow rectangle marks the range the Euro has settled into the past 2 weeks. The low of the range is at 1.2954, the high is at 1.3160. A sustained break of either the low or the high should provide us with a nice directional move. However, taking into account the fact that the EUR/USD has been in a sustained downtrend since the start of February, a break to the downside is a lot more likely. Let’s look at the bigger picture on the Daily Chart. NFP Surprises to the Upside, Risk Assets Selloff The chart above shows that the single currency has been in a sustained downtrend since marking a swing high of 1.3710 on February 1. It reached a low of 1.2954 last week, on the back of the important US jobs report. The report came in lot better than expected, printing a gain of +236,000 jobs versus an expected gain of +162,000. The revisions lowered las…
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Efegen avatar
Efegen 11 Mar.

Thank you for conforming my view. Just a little thing your title has typing errors.

fxsurprise8 avatar

Yeah, I saw that and tried to edit it, but it still got posted for some reason. Lets see how the week plays out, Monday was a dud :P

Victor avatar
Victor 13 Mar.

good one and nice review

Likerty avatar
Likerty 25 Mar.

2980'ties area will be important for the rest of the month as these are important monthly levels. although I think euro will bounce from here for the last time (in upcoming days/weeks) before major bearish continuation which will be inspired by first strong QE ending signals and/or some major risk event..

Efegen avatar
Efegen 28 Mar.

Now it seems it is going go lower!

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  INTRODUCTIONWith my previous article I introduced a study about the policy done in last years by central banks: the purpose was to analyze the impact into stock markets (since correlated with forex) to better understand the current situation and possible developments in the coming days/weeks. With this article I will show my study about U.S. monetary policy, the impact occurred in some world markets, and my attempt to understand whether this policy has produced the desired effect or not. QUANTITATIVE EASINGAs previously underlined, QE is an unconventional monetary policy used by central banks to stimulate the national economy when conventional policy has become ineffective. When I read this sentence for the first time, I thought that in any other circumstance in which this type of expression is used, it simply means that the situation is far more serious than you think, and normally any kind of extreme solution will cause serious damage in some other macro/micro systems directly or indirectly connected.In our contemporary history, this type of policy has been introduced (and widely used) by the American central bank (FED) with a 2 trillion dollars (12 zeros) of new money created…
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scramble avatar
scramble 22 Aug.

yes i said about other conditions. anyway whole commodities have the same charts. almost a copy n paste. can't be only weather ;)

SpecialFX avatar
SpecialFX 26 Aug.

QE increases money supply, but if you have more money chasing the same amount of goods then the price of those goods will go higher (or at least not go as low as they should without QE). Producing goods and services is what creates wealth, not printing money. If everyone was given 1 million euros we would all be poor, because hyperinflation would make those euros worthless and we would have a huge recession :)

scramble avatar
scramble 31 Aug.

hello, sorry didn't notice your comment here! yes wh

scramble avatar
scramble 31 Aug.

unable to post comments.

fxigor avatar
fxigor 26 Oct.

Nice article about QE and correlations.I wrote article about it and I use correlations in my statistical arbitrage trading strategy. Correlations between the USD and 6 major world currencies in last several years went down. Do you use correlations in your own trading strategy? Thank you.

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As we know the mother of all fundamentals is the NFP or Non-Farm
Payroll is an influential statistic and economic indicator released monthly by the United
States Department of Labor as part of a
comprehensive report on the state of the labor
The figure released is the change in nonfarm payrolls (NFP),
compared to the previous month, The NFP figures represents the number of jobs
added or lost in the United states over the last month, except the jobs relating
to the farming industry.
Importance and Interpretation for the Financial Markets
While the overall number of jobs added or lost
in the economy is obviously an important current indicator of what the economic
situation is, the report also includes several other pieces of data that can
move financial markets:1. Unemployment rate in the economy as a
percentage of the overall workforce. This is an important part of the report as the no. of people
out of work is a good indication of the overall health of the economy and this
is a number that is watched by the Federal Bank. When unemployment becomes low,
inflation is expected to start to increase as businesses have to pay high to
hire good workers and increase prices as a resu…
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scramble avatar
scramble 23 Aug.

interesting article that shows people how to read main economic events, out of the simple "red - green" appearing in calendars! well done!

DumbAsArock avatar

Nicely written.

SpecialFX avatar
SpecialFX 26 Aug.

@highwayman Bloomberg News surveys dozens of economists (90+ if I'm not mistaken) from leading financial institutions, that's how the market forecast is calculated, they've been doing it for many years.

@OneGoodTrade NFP numbers are notoriously difficult to predict, you just need to look at the huge discrepancies in those 90 economists' forecasts. There is simply no way to reliably predict NFP figures on a consistent basis. It's just an educated guess :)

DaddyPapi avatar
DaddyPapi 30 Aug.

Nagaraj..regarding your comment on my article ...the article´s concept is quite simple actually..if someone is unemployed, chances are they are looking for an income source..given tight labour markets, normal employment might be difficult..hence the FX as a possible self-employment option...still confusing of funny? you probably only had the attention span to read the headline and not the article itself..

yuvraj23 avatar
yuvraj23 31 Aug.

Very nice n amazing info................

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Introduction:In this Article we are going to analyse recent trends in the labour market for the US and see the most likely directions in which the Labour market will take over the coming years. Since the Global Financial Crisis in 2007/08 across the world, a rise in the unemployment rate has been noted in most western developed countries. In most places the Unemployment rate has stayed higher and there have been few signs of recovery in nearly every country.Problems:- High unemployment*chart from Federal reserve of St Louis' data bankAs seen in this chart above, the unemployment rate (Spread between Employment level and Civilian Labour force) has risen significantly since the recession and while is trending down, it is  doing so at an incredibly slow pace.For the economy, High Unemployment rates are bad. Quite simple to understand, when there are less people with jobs there is a lower level of demand in the economy. When this occurs people employed in sectors such as retail will lose jobs as companies require less staff to sustain the required demand levels.From here a downward demand spiral ensues as those unemployed add to the decrease in demand and so the process repeats itself.…
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AdrianWS avatar
AdrianWS 23 July

Would have loved to go into more detail, but I ran out of words allowed. Had to skip out some sections but I left in the most important parts. If you've any questions just ask.


AdrianWS avatar
AdrianWS 25 July

Presenting this article on Dukascopy community TV later today at 13:00 GMT hope you can be there.

AdrianWS avatar
AdrianWS 29 July

Last week we saw Inital claims print at 353K on estimates of 381K. Much better than expected in otherwords. The previous week was revised upwards by 2K. The upcoming week hold NFP and this will be very important so get ready.

AdrianWS avatar
AdrianWS 31 July

US ADP coming in tomorrow. Estimates are in range 115K to 130K.

Over the past few days there has been some employment data

Japan posted 4.3% unemployment rate
german u/e change was 7K
Spanish U/E rate - 24.6%

Still looking forward to NFP's

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Frequently released macro figures are good opportunity to show how you can take advantage of this kind of market events. Much is said about it, "do not play when the figures come", but why not take advantage of moves generated by them to open the next position or reconstruction of old? I am not talking about the entrance at the time of publication, but shortly after. Below I present it as a long position rebuilt, which was exited by my trailing stop (set slightly below the low of 7.30 GMT 06/03/11). Case was happened 06/03/11. The default timeframe is M10. From about 12:00 polish time (10:00 GMT), we could see a clear phase of waiting for figures reading and only the necessary foreign exchange is being done. Well illustrated by the GMMA, which took in the period before the publication of a very compact and flat arrangement. I found that market is general uptrend (based on H1 and D1), quite clearly and in accordance with that, I manage opened positions and open only long positions in daytrading. At 14:30 (12:30 GMT), NFP, the unemployment rate and average hourly earnings has been published. All data were clearly negative for the dollar, which caused the initial sh…
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przemyslaw avatar
przemyslaw 11 Oct.

Great job again! That's how every artcile should looks in this contest: many charts and brief explanations. In addition, author shows how easy can be profiting on the forex market.
Good luck in the contest!

ritesh avatar
ritesh 12 Oct.

Nicely written, quite detailed and informative article. Nice one..keep more coming. Best of luck and +1

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