Today is an important day for financial markets. NFP labour market data – that is, government data on non-farm employment in the US. Undoubtedly, this will be the most important data in the passing week. It is expected that 365 thousand new jobs were added.

  • ADP report 807k
  • expected 365k new jobs according to NFP
  • CHFJPY – cross of safe havens

On Wednesday, January 5, we learned about labor market data collected by ADP – The ADP National Employment Report is a measure of monthly changes in private non-farm employment based on data from about 400,000 US business clients. Published two days before government data, it often serves as a preview of what we can expect from the government’s (NFP) labour market report.

adp vs nfp 2022
Comparison of ADP data with official NFP. Blue chart current data, pink chart expected data.

What will it be like today?

More than double the expected number of new jobs reported by ADP on Wednesday – 807tys – would also suggest higher data on today’s NFP. Surely we can suggest ADP data when predicting government NFP data?

When we look at the charts above we see that often these data do not have much to do with each other. For example, in the last months ADP/NFP were 374/235 in September; 568/194 in October; 571/531 in November; 534/210 in December. The differences are too big to be used as a basis for predicting today’s NFP.  We are therefore looking forward to 14:30 when everything will become clear.

CHFJPY – a pair of safe havens

In anticipation of high volatility in the US dollar pairs (majors), I looked at a pair of two currencies considered to be the so-called “safe heaven”. When analysing this pair, I take into account only technical aspects – apart from today’s payrolls.

CHFJPY - a pair of safe havens
CHFJPY – a bottom breakout from the inside bar is very likely when a downward divergence appears

An inside bar appeared on the daily chart accompanied by freshly started downward divergence. A bottom breakout is very likely. If this happens, declines may reach the nearest S/R level located at 124.00. In view of the upcoming NFP, which will be announced at 14:30, it is worth considering reducing the size of positions, assuming higher than usual volatility in the markets.

The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE .
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