EUR/USD: Trading the US Nonfarm Employment Change

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.

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 substantial impact on the direction of EUR/USD.

Nonfarm Employment Change improved to 235 thousand in the February report, well above the estimate of 196 thousand. The markets are braced for a drop in March, with an estimate of 174 thousand. Will the indicator repeat and beat the forecast?

Sentiment and Levels

The eurozone has enjoyed a strong first quarter, and this week’s PMI reports pointed to expansion in the services and manufacturing sectors. In the US, the Federal Reserve remains cautious and the markets are skeptical about tax cuts from Trump. So, the overall sentiment is bullish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.0830, 1.0775, 1.0720, 1.0660, 1.0630 and 1.0520

5 Scenarios

  1. Within expectations: 169K to 179K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 180K to 185K: An unexpected higher reading could push the pair below one support line.
  3. Well above expectations: Above 185K: Such an outcome could push the pair lower and two or more support lines could fall as a result.
  4. Below expectations: 163K to 168K: A weak reading could result in EUR/USD breaking above one resistance line.
  5. Well below expectations: Below 163K. A very soft reading could result in the pair breaking above two or more resistance lines.

For more on the euro, see the EUR/USD.

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