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 12:30 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 dropped in March to 215 thousand, beating the estimate of 206 thousand. The markets are expecting the downward trend to continue in the April report, with an estimate of 203 thousand.
Sentiment and Levels
The euro remains at high levels against the dollar, much to the consternation of the ECB. However, there appears little that Mario Draghi & Co. can do to stop the euro’s rise. Although the US labor market has looked very strong, a surprisingly soft ADP Nonfarm Payrolls report could point to a downward correction in employment numbers, which would send the pair to lower levels. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1712, 1.15, 1.1460, 1.1410 and 1.1335
5 Scenarios
- Within expectations: 200K to 206K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 207K to 211K: An unexpected higher reading could push the pair below one support line.
- Well above expectations: Above 211K: Such an outcome could push the pair lower and two or more support lines could fall as a result.
- Below expectations: 195K to 199K: A reading below the 200-thousand level could result in EUR/USD breaking above one resistance line.
- Well below expectations: Below 195K. A very weak reading could result in the pair breaking above two or more resistance lines.
For more about the euro, see the EUR/USD forecast.