Home EUR/USD Trading the US Non-Farm Payrolls
Opinions

EUR/USD Trading the US Non-Farm Payrolls

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.

Update:  Non-Farm Payrolls: +280K – USD surges

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 affect the direction of EUR/USD.

After a dismal reading in March, Employment Change rebounded in April with a reading of 223 thousand. This was a bit short of the  forecast of 228 thousand. Little change is expected in the May report, with the  estimate standing at 226 thousand.

Sentiment and Levels

The euro has shown some life to start the month of June, but the relief may be only temporary for the common currency, which has struggled badly against the US dollar. We will probably get another reminder to the main driver of the pair down: monetary policy divergence, with a strong message from the ECB.  The  ongoing crisis in Greece  continues to percolate and  the uncertainty is  not good news for the euro.  In the US, data is improving, and the dollar  has enjoyed broad strength as a result. So, the overall sentiment  remains  bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.1450, 1.1373, 1.1290, 1.12, 1.1113 and 1.1050.

5 Scenarios

  1. Within expectations: 223K to 229K. In such a scenario, the EUR/USD is likely to rise within  range, with a small chance of breaking higher.
  2. Above expectations: 230K to 234K: An unexpected higher reading could send the pair  below one support  line.
  3. Well above expectations: Above 234K: 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:  218K to 222K: A  weaker reading  than forecast could result in EUR/USD breaking above one resistance line.
  5. Well below expectations: Below 218K. In this scenario, the pair could break through two or more resistance lines.  

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

To follow this event live:       [do action=”calendar-event” eventid=”9cdf56fd-99e4-4026-aa99-2b6c0ca92811″/]

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.