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USD/JPY binary signal - U.S. Nonfarm payrolls - 02 June 2017

Signal details
Entry Price: 
111.50
Close Price: 
110.41
Direction: 
High
Expiry Time: 
20:00 GMT
Result: 
OTM
How we trade
5/5 of 3 ratings

The U.S. Bureau of Labor Statistics (BLS) will be releasing the monthly nonfarm payrolls report today for the month of May. The data will be released at 1230 GMT. Economists polled by Bloomberg expect the U.S. economy to add 186k jobs during the month of May. This is smaller than 211k job growth seen in April.

The average hourly earnings are expected to rise 0.2% on a month over month basis in May, slower than the 0.3% increase seen in April. The United States unemployment rate is expected to remain steady at 4.4%.
The NFP data will be an important figure to watch as a weaker than expected print could potentially upset the Fed's plans for a rate hike which is due in just two weeks.

However, various indicators are already suggesting that the May payrolls report could be stronger than expected. Yesterday, the ADP/Moody's private payrolls numbers showed that private hiring rose 235k during the month of May. This was significantly higher than the estimates of 181k and stronger than April's 174k revised print.

Also, the Institute of Supply Management (ISM) released the monthly manufacturing PMI report yesterday which showed a modest increase in the index to 54.9. However, the employment index which shows the health of hiring in the manufacturing sector was seen rising strongly.

Alongside the PMI data, other economic releases including the Fed's Beige book showed that due to lack of finding qualified personnel, manufacturers were seen hiking wages as well. This data suggests that today's payrolls report could be stronger than expected and will certainly confirm the view that the Fed will hike interest rates when it meets on June 14th.

Given the above, today's binary trading signal recommendation is to purchase daily CALL options in USDJPY. We expect to see the USDJPY supported to the upside with price action likely to post a modest pullback ahead of pursuing gains towards 113.00 eventually. Therefore, purchase CALL options at 111.50 for a 20:00 GMT expiry time.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.