Typically, the largest mover immediately after the Non-Farm Employment Change report is Gold followed by the USDJPY currency pair. While the US dollar is no longer pegged with Gold, there is a correlation between the two. As the daily chart below shows, if Gold is moving up, the USDJPY will typically move down. Or if Gold is moving down, the USDJPY will move up.
The Gold daily chart indicates a line of resistance formed around 1300 and a line of support has potentially formed at 1219.50. If Gold manages to break the support area at 1219.50, then the next area of support is on the weekly chart at 1186.3. The key is the Stochastics is oversold on the daily indicating a retracement is likely. Therefore, watching the daily to see if a lower high is formed prior to the report will be critical in placing a short OTM prior to the market report. If the retracement does not occur prior to the market report, then a long OTM could be placed prior to the market report.
As shown above, since the USDJPY has a negative correlation with Gold, a trader could also take advantage of the Non-Farm Employment Change by placing the opposite OTM trade on the USDJPY. For example, if the trader is short on Gold, they would place a long trade on the USDJPY.
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