EUR/USD: Trading the US NFP May 2015

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.

Update:  Non-Farm Payrolls: +223K – as expected

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 affect the direction of EUR/USD.

Nonfarm Employment Change plunged in March to 126 thousand, nowhere near the forecast of 246 thousand. The indicator is expected to rise back above the 200 thousand level, with the estimate standing at 227 thousand.

Sentiment and Levels

With the euro improving to a 10-week high, the correction we are seeing in the pair is now well established. This does not change the bigger picture which is for a lower euro (and could change later in the year), but after the breakout of 1.1050, the turn around in German bunds and the momentum we are seeing, EUR/USD could give lose some of its recent gains. The US has produced some weak numbers, but is expected to bounce back during Q2. The euro could remain bid also with mediocre figures. So, the overall sentiment is bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.15, 1.1450, 1.1373, 1.1270 and 1.1113.

5 Scenarios

  1. Within expectations: 224K to 231K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 232K to 236K: An unexpected higher reading could send the pair below one support line.
  3. Well above expectations: Above 236K: The chances of such a scenario are low. Such an outcome could push the pair lower and two or more support lines could fall as a result.
  4. Below expectations: 219K to 223K: A weaker reading than forecast could result in EUR/USD breaking above one resistance line.
  5. Well below expectations: Below 219K. In this scenario, the pair could break through two or more resistance lines.

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

To follow this event live:  

Powered by FXstreet.com
Get the 5 most predictable currency pairs

Leave a Reply

Your email address will not be published. Required fields are marked *