US Non-Farm Employment Change measures the change in the number of newly employed people in the US, excluding workers in the farming industry. A reading which is higher than the market forecast is bullish for the dollar.
Update: Non-Farm Payrolls +209K, unemployment rate 6.2%- USD falls
Here are the details and 5 possible outcomes for EUR/USD.
Published on Friday at 12:30 GMT.
Indicator Background
Job creation is one of the most important leading indicators of overall economic activity. The release of US Non-Farm Employment Change is highly anticipated by the markets, and an unexpected reading could affect the direction of EUR/USD.
In May, Nonfarm Payrolls was excellent, climbing to 288 thousand. This easily beat the estimate of 214 thousand. The markets are bracing for a soft reading for June, with the estimate at just 230 thousand. So we could see a repeat of the ADP Nonfarm Payrolls report, which weakened last month.
Sentiment and Levels
With inflation numbers coming out of the euro-zone, we will probably get a stark reminder of why the ECB is in an ultra-easing policy, and that’s here to stay, especially as German business confidence slides and France is still lagging behind. In the US, a sparkling GDP will add pressure on the Fed to tighten interest rates. Recent data is quite encouraging. The “buy the dips” mode that characterized the pair’s trading for a long time seems to have vanished: bad news sticks. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.35, 1.3450, 1.34, 1.3335, 1.3295 and 1.32.
More: EUR/USD and USD/JPY pre NFP Elliott Wave Analysis
5 Scenarios
- Within expectations: 225K to 235K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 236K to 248K: An unexpected higher reading could send the pair below one support line.
- Well above expectations: Above 248K: The chances of such a scenario are low. Such an outcome could prop up the pair, and a second support line could fall as a result.
- Below expectations: 212K to 224K: A weaker reading than forecast could result in EUR/USD pushing above one line of resistance.
- Well below expectations: Below 212K. In this scenario, the pair could move above a second resistance line.
For more about the euro, see the EUR/USD.
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