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How to Trade on the Jobs Report

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The first day of June will bring a new report on the job market. Here's how to play it.

Factors pointing to U.S. economic weakness are everywhere, and the nonfarm payroll report coming next Friday will be watched especially closely.

Joe Lavorgna, chief economist at Deutsche Bank, is expecting a gain of 150,000 jobs, in line with the market consensus. "At the moment there's no reason to think anything really much better," he says.

Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank, is prepared whether or not that comes true. If nonfarm payrolls come in over 150,000, Bourdeau wants to sell the dollar and buy the Canadian dollar, she told CNBC's Melissa Lee.

"I'd like to be long a commodity currency and get some risk seeking going," she says.

If nonfarm payrolls come in around 115,000 or lower, she recommends the reverse trade because the dollar would likely strengthen on its safe haven status.

Bourdeau is banking on the first scenario,partly because a report on manufacturing that usually precedes the payroll data will not be coming out, increasing the chances that forecasters will not be able to adjust for an upside shift. So she wants to sell the dollar against the Canadian dollar at 1.0320 and set a stop at 1.0450, with a target of 1.0075, around the 200-day moving average.

Todd Gordon, co-head of research and trading at Aspen Trading Group, is skeptical. "She's living dangerously," he says, because in technical terms, "I think dollar-Canada is actually exhibiting a lot of strength."

You can watch the discussion on this video.

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