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 affect the direction of EUR/USD.
Nonfarm Employment Change slipped in September, dropping to 142 thousand. This was much weaker than the estimate of 2o1 thousand. The markets are expecting a strong recovery in October, with the forecast at 179 thousand. Will the indicator meet or beat the estimate?
Sentiment and Levels
Monetary policy divergence has sharpened, courtesy of the Fed’s intention to raise rates in December. In the euro-zone, the ECB has hinted broadly at further stimulus and that will likely be euro negative. The small rise in inflation is not a game changer and persistently weak German data could certainly hurt. So, the overall sentiment remains bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1070, 1.10, 1.09, 1.0810, 1.0760 and 1.0715.
5 Scenarios
- Within expectations: 176K to 184K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 185K to 189K: An unexpected higher reading could send the pair below one support line.
- Well above expectations: Above 189K: 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: 179K to 183K: A weaker reading than forecast could result in EUR/USD breaking above one resistance line.
- Well below expectations: Below 179K. In this scenario, the pair could break through two or more resistance lines.
For more about the euro, see the EUR/USD.