NFP Trading

Universal Banks

NFP is part of a monthly report representing how many people are employed in the US, in manufacturing, construction, and goods companies.


NFP stands for Non-Farm Payrolls, which is actually part of the Employment Situation report, released by the Bureau of Labor Statistics, an agency for the U.S. Department of Labor (DOL).

The NFP is a part of the monthly Employment Situation Report and a key economic indicator that estimates the number of jobs gained (excluding farm workers) in the U.S. in the previous month. The Employment Situation Report also includes the Labor Force Participation Rate, the Unemployment Rate, Average Hourly Earnings, and Average Workweek Hours, among many other statistics.

The nonfarm payroll report consistently causes one of the largest rate movements of any news announcement in the foreign exchange (forex) market. As a result, many analysts, traders, funds, investors, and speculators anticipate the NFP number and the impact that it will have on forex.

The NFP report is typically released on the first Friday of each month, providing the total monthly increase or decrease in paid U.S. workers across most businesses. Increasing numbers may show economic expansion but may also give investors reason to be concerned about inflation and decreasing numbers suggest a broader economic concern.

  • Nonfarm payrolls (NFPs) are an important economic indicator related to employment in the U.S.
  • Data released on NFPs can be a catalyst for trade in foreign exchange trades based on changes in employment.
  • Technical analysis can be employed in the NFP report using 5 or 15-minute chart intervals

What Is the NFP Trading Strategy?

The NFP report generally affects all major currency pairs, but one of the favorites among traders is the British pound/U.S. dollar (GBP/USD). Because the forex market is open 24 hours a day, all traders can trade on the news event.

Once the market has digested the information’s significance and initial swings, investors will enter a trade in the direction of the dominating momentum and a signal indicating that the market has chosen a direction. This avoids jumping in too early and decreases the probability of being whipsawed out of the market before it has chosen a direction.

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