We all remember the knockout figures of the NFP which came in just before the 4th of July holiday. That data provided a strong upward lift to Dollar demand and then funneled into a broad Dollar rally in the aftermath of the strong figure which afforded a heavy whiff of optimism over the U.S. economic recovery. As you might expect from such a broad rally, some FX players recognized the potential and gained big from the NFP. In this article, we will discuss one of them, Anas Sleiman , a trader from Ireland who cashed in big on the NFP surprise.
Sleiman Prepares for NFP
So what exactly was the chain of events which led to Sleiman’s staggering 40.21% profit on the USD/CHF? Sleiman began homing in on the USD/CHF which tends to gain when the Euro falls vs the Dollar a day before the NFP in a clear estimate on this side that a Dollar rally was in the making. Sleiman has opened a long USD/CHF at the ask price of 0.8876 and waited for the market’s own volatility to do its thing when the NFP results echoed through the news wire. What propelled Sleiman to bet on a strong NFP? Could be just a technical pattern in the CHF but the day Sleiman opened the position, unexpectedly strong results from ADP showed that the private sector had added 101,000 new jobs in June and set the stage for high expectations for the U.S. government’s own anxiously awaited and exceptionally critical labor data, the NFP or the non-farms payroll report.
Market Reaction to NFP
Though in the past there has been dashed expectations and major disappointments, this time everything worked out in perfect synchronicity, with actual new jobs for the month reported at 288,000, far above economists’ estimates of 212,000. Even better, May’s new jobs numbers got an upward revision of an additional 7,000 new jobs to 224,000 new jobs while April’s new job was revised higher by 20,000. Better still, the unemployment rate unexpectedly dropped to 6.1% from 6.3%.
With “full employment” one of the Federal Reserve’s two mandates, the positive labor news raised speculation that the Fed might soon end its long period of maintaining a very accommodative policy. That led to the U.S. Dollar last week posting the largest single week’s gain in six weeks and the U.S. Dollar Index, a measure of the dollar’s relative strength against its major peers, rising 0.24% by the week’s close and gaining on both the Euro and the Swiss Franc.
Sleiman Cashes In
Given the implications of the strong NFP results, Sleiman’s position was not too late with the USD/CHF rallying more than 100 pips from the 0.885 zone to above 0.895, pushing Sleiman’s position into the money, with Sleiman then closing at 0.8948 and carving a 72 pips gain and 40.21% profit on his investment in a matter of only two days. As one can see in the chart below, Sleiman’s quick exit from the position allowed him to lock in his ...
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