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 slid to 156 thousand in the December report, well short of the estimate 175 thousand. The markets are forecasting a strong turnaround in January, with an estimate of 170 thousand. Will the indicator rebound as expected?
Sentiment and Levels
There were no surprises from the Federal Reserve on Wednesday, which maintained rates and said that the economy continues to expand at a moderate rate. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.10, 1.0950, 1.0870, 1.0775, 1.0710 and 1.0650
5 Scenarios
- Within expectations: 167K to 173K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 174K to 178K: An unexpected higher reading could push the pair below one support line.
- Well above expectations: Above 178K: Such an outcome could push the pair lower and two or more support lines could fall as a result.
- Below expectations: 162K to 166K: A weak reading could result in EUR/USD breaking above one resistance line.
- Well below expectations: Below 162K. A very soft reading could result in the pair breaking above two or more resistance lines.
For more about the euro, see the EUR/USD forecast.
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