Economic calendars show the scheduled releases and financial events of various countries. The most prominent include NFP, GDP reports, Balance of Trade, policies on interest rates, and the likes. Skilled traders use this information to analyze market trends and prepare for balanced buy-sell decisions. They usually are aware of how to interpret the given numbers.
Listed events influence asset prices and usually make them fluctuate, widening the spreads.
So, what data can be useful for trades?
Time is the first important indicator because the changes may be so fast as to provoke volatility right after the announcement. So, traders should keep in mind all the key events and track them cautiously, following their time zone.
FBS economic calendar also displays which currency will be most likely affected by the event and to what extent. You get historical data as well as a forecast and the current price. It helps to see the big picture per asset.
Day traders prefer to close out right before the significant releases and wait before rushing back to trading after it. Thus, they avoid elevated risks.
If used wisely, the economic calendar by FBS trade allows traders to be always one step ahead, stay disciplined, and calmer because they know what to expect, more or less.
NFP Release on the Economic Calendar
NFP (Non-Farm Payroll) is the main economic indicator of the USA. It shows the number of new jobs in all the spheres, excluding farm and government workers, private household employees, and those who are part of nonprofit organizations. This indicator is announced once a month on the first Friday at 8:30 (EST). NFP release usually provokes volatility in the financial markets because it implicitly shows the state of the US economy, and the majority of traded assets depend on the dynamics of the latter.
More jobs mean a healthy economy with plenty of people ready to save or spend money lifting both GDP and inflation. Usually, when the jobs are sufficient, the Fed increases interest rates and vice versa.
For traders, it is crucial to monitor what number of analysts forecasting for the upcoming NFP. If the released number of jobs is close to what was expected or more, it will be a positive result. USD will most likely rise. Conversely, if NFP goes beyond expectations, traders may rush to safe assets, for example, gold.
EUR/USD and GBP/USD are the best pairs to trade based on NFP due to their liquidity. If NFP works well for the USD, it will mean that these currency pairs will move in the opposite direction. To reach the best result, market players are advised to trade 60 minutes after the actual release, apply both technical and fundamentals; before the release identifies support and resistance levels on a 60-minute chart.
These are just a few tips by FBS broker. Anyways, traders should follow an economic calendar not to miss an important event that influences price fluctuations.