US Nonfarm 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. Here are the details and 5 possible outcomes for EUR/USD.
Published on Friday at 12:30 GMT.
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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 can have a strong impact on the direction of EUR/USD.
Nonfarm Employment Change dropped to 257 thousand in July, but this easily beat the forecast of 180 thousand. The estimate for the August report stands at 186 thousand. Will the indicator repeat and handily beat the estimate?
Sentiment and Levels
With the Eurozone stuck in low inflation mode, the ECB is on course to add more easing, while a September rate hike is back on the table in the US. This should push the pair lower. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1335, 1.1230, 1.1190, 1.1140, 1.1070 and 1.10
5 Scenarios
- Within expectations: 177K to 183K: In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 184K to 188K: An unexpected higher reading could push the pair below one support line.
- Well above expectations: Above 189K: Such an outcome could push the pair lower and two or more support lines could fall as a result.
- Below expectations: 172K to 176K: A weak reading could result in EUR/USD breaking above one resistance line.
- Well below expectations: Below 172K. A very soft reading could result in the pair breaking above two or more resistance lines.
For more about the euro, see the EUR/USD.