How to Trade the Upcoming Jobs Report

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Terry J Alcorn | iStock Exclusive | Getty Images
Canadian flag

A new employment report is on the way, and this strategist sees a trading opportunity.

Are you ready for the latest report on employment, due out on Friday?

According to Joe Lavorgna, Deutsche Bank's chief economist, the economy will turn out to have added 210,000 jobs in January, including 225,000 in the private sector.

Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management, Institutional, says her firm is not that optimistic, and 150,000 is more likely. Still, she says, "the way I'm thinking about this number is risk on," so either forecast would support her trade.

Patterson told CNBC's Melissa Leeshe wants to buy the Canadian dollar and sell the yen.

"In Canada, you have a slight carry trade, with short term rates at one percent, and the Bank of Canada says they're staying there," she says. Canada also stands to benefit from rising commodity prices.

In Japan, meanwhile, "current account support for the yen is disappearing," what with Japan reporting its first annual trade deficit in 31 years.

Patterson wants to enter the trade at 75.00 with a target of 79.50 and a stop at 73.50.

You can watch the discussion on the video.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.

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