DAX 30: Traders Await NFP Results Later Today

Talking Points

• Today’s U.S. Non-Farm Payrolls report (NFP) may either send the DAX 30 soaring or may cause it to plunge.
• The DAX is short-term bullish above last Friday’s low of 9336.

Today’s U.S. Non-Farm Payrolls report (NFP) may either send the DAX soaring, causing it to take out the January 27 high of 9931, which may trigger a rally to the January 13 high of 10,164.Or, on the flip side, it may cause it to plunge to Tuesday’s breakout level of 9594, eventually taking out the trend defining low of 9336. On a break to the trend defining low, the DAX may reach the February 24 low of 9122.

The outcome depends on the NFP beating or missing economists’ expectations, with a beat most likely triggering a higher DAX and vice versa. The unemployment rate will also be watched, but the unknown factor is trader’s reaction to wage inflation. With the unemployment rate at good levels, the Fed will watch various inflation gauges such as wage growth in deciding when it’s time to hike rates the next time.

Average Hourly Earnings are expected to grow by 0.2% MoM and 2.5% YoY, and a higher than expected reading will potentially boost expectations of Fed rate hikes, which may hurt the DAX 30.

A Bloomberg news survey consisting of 92 economists, has projected that the U.S. labor market added 195k new jobs from 151k last month, while the unemployment rate is expected to remain unchanged at 4.9%.

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DAX 30 | FXCM: GER30

Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano

--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com

Contact and follow Alejandro on Twitter: @AlexFX00

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By: Alejandro Zambrano, Market Analyst