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EUR/USD: Trading the US NFP April 2 2015

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 improved sharply in February, jumping to  295 thousand. This crushed the estimate of 240 thousand. The markets are expecting a sharp drop in the March report, with an estimate of 247 thousand. Will the indicator repeat and beat the forecast?

Sentiment and Levels

EUR/USD has found its footing  recently, but there is more room for the pair to drop. However, we’re unlikely to see any dramatic moves  until  after the Easter holiday.  The ongoing Greece bailout crisis could have a major impact on  the pair, and a pause in the crisis could help EUR/USD in the short term. In general, ECB QE  continues in full force and continues to weigh on the euro. Over in the US, it seems that the  losing streak of poor data  may be over as  we have already seen the first signs of this.  So, the overall sentiment  is neutral  on EUR/USD towards this release.

Technical levels, from top to bottom: 1.1113, 1.1050, 1.0910, 1.0760, 1.0615 and 1.0550.

5 Scenarios

  1. Within expectations: 244K to 250K. In such a scenario, the EUR/USD is likely to rise within  range, with a small chance of breaking higher.
  2. Above expectations: 251K to 255K: An unexpected higher reading could  push the pair  below one support  line.
  3. Well above expectations: Above 255K: 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:  239K to 243K: A  weaker reading  than forecast could result in EUR/USD breaking above one resistance line.
  5. Well below expectations: Below 239K. 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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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.