Prior to releasing any economic indicator, the responsible organization collects forecasts from economists, central banks, private market participants, and various organizations. The creation of an NFP forecast involves drawing the median of the economists’ forecasts. So, it’s advisable for traders to always go through central bank speeches.
If the actual news release of the forecasts is perfect, the market movements are minimal. Nonetheless, actual figures can differ because institutions’ and economists’ predictions can vary from the target price.
Accordingly, several possible incidents can follow NFP’s all-important news release. As a trader, it’s crucial to evaluate the following scenarios in the provided economic data.
NFP report data is the same as the previously published NFP forecasts. In such a situation, it means the market continues to oscillate.
NFP report data is more significant than the forecast. This info indicates signs of strength in the US economy, so the dollar has a considerable advantage when trading.
NFP report data is lower than the forecasts. It means the US economy is in a downward trend, so traders should consider avoiding the dollar in the stock market.
Remember that the difference between the forecasts and the result is more crucial than the ultimate result. This difference between the two can help advanced traders and attentive forex traders anticipate the significance of the movement following the NFP release.