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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.

Update: NFP +214K, good internal data

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.

Non-Farm Employment Change  bounced back last month with  a strong gain of 248 thousand, well above the estimate of 216 thousand. The estimate  for  the upcoming release stands up 229 thousand. Will the indicator  repeat and beat the  forecast?


Sentiment and Levels

The prognosis looks grim for the Eurozone, which  has been suffering from very low inflation and weak growth, with a central bank that is looking for ways to expand its balance sheet, taking a page out of the book of the Federal Reserve. In the US,  QE has just ended, the economy advances nicely and the next move is a rate hike.  Despite a lower value of the euro in recent months, inflation hasn’t picked up. The  Eurozone will need an  even weaker euro in order to recover, and the  ECB could take  steps in that direction. So, the overall sentiment  remains  bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.27, 1.2660, 1.2570, 1.25, 1.2545 and 1.2385.


5 Scenarios

  1. Within expectations: 226K to 232K. In such a scenario, the EUR/USD is likely to rise within  range, with a small chance of breaking higher.
  2. Above expectations: 233K to 239K: An unexpected higher reading could send the pair  below one support  line.
  3. Well above expectations: Above 239K: 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.
  4. Below expectations:  219K to 225K: A  weaker reading  than forecast could result in EUR/USD breaking  above  one resistance  line.
  5. Well below expectations: Below 219K. In this scenario, the pair could break through two or more resistance lines.

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

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