Search ForexCrunch

JOLTS Job Openings measures the change in the number of employment openings last month, excluding the farm 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 14:00 GMT.

 

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. Thus, publication of employment data such as JOLTS Job Openings is highly anticipated by the markets, and the indicator can have a strong impact on the direction of EUR/USD.

JOLTS Job Openings  pushed above the 4.0 million level in April, coming in at 4.17 million. This was  easily beat the estimate of 3.99 million. The markets are  expecting the upward trend to continue, with an estimate of 4.21 million. Will the indicator repeat and beat this month’s prediction?

 

Sentiment and Levels

The exchange rate remains a concern as EUR/USD is  very close to the 1.40 level. Inflation is still low after April’s “dead cat bounce” and deflation dangers remain.  There is strong pressure on the ECB to take some action, and negative deposit rates or QE are on the table. Either of these steps would push down the euro.

In the US, job growth is certainly encouraging despite the lack of wage growth in April. The narrative of a “spring bounce” after a harsh winter is gaining traction, as we continue to see stronger US numbers. So, the sentiment is bearish on EUR/USD towards this release.

Technical levels from top to bottom: 1.4105, 1.4055, 1.40, 1.3964, 1.3905 and  1.3865.

 

5 Scenarios

  1. Within expectations:  4.17M to 4.24M: In this scenario, EUR/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
  2. Above expectations:  4.25M to 4.29M: A reading above expectations could push the pair above one resistance level.
  3. Well above expectations: Above 4.29M: A sharp rise in employment numbers could propel EUR/USD upwards, and a second resistance level could be broken.
  4. Below expectations:  4.12M to 4.16M: A weak reading could pull the pair downwards, with one support level at risk.
  5. Well below expectations: Below 4.12M: Such a scenario would be bearish for the dollar, and EUR/USD could break a second support level.

For more on the euro, see the EUR/USD forecast.