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 13:30 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 sharply in February, jumping to 295 thousand. This crushed the estimate of 240 thousand. The markets are expecting a sharp drop in the March report, with an estimate of 247 thousand. Will the indicator repeat and beat the forecast?
Sentiment and Levels
EUR/USD has found its footing recently, but there is more room for the pair to drop. However, we’re unlikely to see any dramatic moves until after the Easter holiday. The ongoing Greece bailout crisis could have a major impact on the pair, and a pause in the crisis could help EUR/USD in the short term. In general, ECB QE continues in full force and continues to weigh on the euro. Over in the US, it seems that the losing streak of poor data may be over as we have already seen the first signs of this. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1113, 1.1050, 1.0910, 1.0760, 1.0615 and 1.0550.
5 Scenarios
- Within expectations: 244K to 250K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 251K to 255K: An unexpected higher reading could push the pair below one support line.
- Well above expectations: Above 255K: 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.
- Below expectations: 239K to 243K: A weaker reading than forecast could result in EUR/USD breaking above one resistance line.
- Well below expectations: Below 239K. In this scenario, the pair could break through two or more resistance lines.
For more about the euro, see the EUR/USD.
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