US ADP NFP Employment Change

March 6, 2013 

US ADP NFP Employment Change

ADP NFP (Nonfarm Payroll) release is a high impact release and it’s monitored by currency traders worldwide as they look for hints on Friday’s NFP official release. Here’s the forecast:

8:15am NY Time US ADP NFP Change Forecast 168K 

Previous 192K

Deviation: 50K (BUY USD 218K / SELL USD 118K)

Definition:ADP Employment report was developed and is maintained by Macroeconomic Advisers, LLC. It is a measure of employment derived from an anonymous subset of roughly 500,000 U.S. business clients. During 2011, this subset averaged about 344,000 U.S. business clients and represented over 21 million U.S. employees working in all private industrial sectors. The ADP NFP report is a monthly estimate of private nonfarm employment among companies in the United States with 1-49 employees and is a subset of the ADP National Employment Report. The data for both reports is collected for pay periods that can be interpolated to include the week of the 12th of each month, and processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of establishments. Due to this processing, this subset is modified to make it indicative of national employment levels; therefore, the resulting employment changes computed for theADP National Employment Report are not representative of changes in ADP’s total base of U.S. business clients. (Taken from official ADPEmploymentReport.com…)

The Trade PlanI usually don´t trade this release but I use it for future trend references. However, if the deviation of 50K is actually hit, the market probably wont have a problem pushing it, and this will undoubtedly change market perception for the NFP release; therefore its best to be around your computer during the release time rather than find out what happened hours later and potentially miss the entire movement.

With the above being said, we´ll be looking for a deviation of 50K, so if we get 218K or better release, I´d be looking to BUY USD against the weakest currency ; if we get a 118K or worse, then I´d be looking to SELL USD against the strongest currency.

Traded pair	Expected figure	Deviation  trigger
	USDJPY	168 (k)	±50 (k)

	Buy	USDJPY	if actual figure is or is above	218 (k)
	Sell	USDJPY	if actual figure is or is below	118 (k)

Expected move during first 20 minutes after the release is 40 pips or more.

Recommended Pairs: EURUSD, NZDUSD, USDJPY.

USD/JPY - US Dollar / Yen

Resistances : Weekly 94.6 ; Daily 94.05 ; Hourly 93.5

Supports : Weekly 92 ; Daily 92.45 ; Hourly 92.9

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With the above being said, we´ll be looking for a deviation of 50K, so if we get 218K or better release, I´d be looking to BUY USD against the weakest currency