US Non-Farm 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. Thus, the publication of employment data is highly anticipated by the markets, and an unexpected reading could affect the direction of EUR/USD.
The April release was a major disappointment, with only 88 thousand new jobs created. This was well off the estimate of 198 thousand. The markets are anticipating a reading of 150 thousand in the upcoming release. Will the indicator bounce back and beat the forecast?
Sentiment and Levels
The economic situation in Europe is worsening by the day, and signs of weakness are also evident in the core of the core: Germany. Even if the ECB doesn’t cut the rates, it will have to acknowledge the bad conditions and the high exchange rate of the euro. A cut of the deposit rate was not ruled out by Draghi in the past, and remains a strong possibility. See more in the ECB preview. So, the overall sentiment is bearish on EUR/USD towards this release.
The US isn’t doing too well either, as a long string of bad numbers continues. At the same time, the unemployment rate is still significantly lower than in the Eurozone and the economy is still growing. Non-Farm Payrolls could shake up the markets, but the focus certainly shifts to the euro-zone now.
Technical levels, from top to bottom: 1.3255, 1.32, 1.3170, 1.3140, 1.31 and 1.3050.
5 Scenarios
- Within expectations: 135K to 165K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 166K to 180K: An unexpected higher reading can send the pair below one support line.
- Well above expectations: Above 180K: The chances of such a scenario are low. Such an outcome would push EUR/USD lower, and a second support line could fall as a result.
- Below expectations: 120K to 134K: A smaller increase than forecast could result in EUR/USD pushing above one line of resistance.
- Well below expectations: Below 120K. In this scenario, the pair could move above a second resistance line.
For more about the euro, see the EUR/USD forecast.
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