EUR/USD: Trading the US NFP Jul 2015
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EUR/USD: Trading the US NFP Jul 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. This event is usually released on the first Friday of the month, but has been brought up  a day due to the Fourth of July holiday. Here are the details and 5 possible outcomes for EUR/USD.

Update:  Non-Farm Payrolls: +223K below expectations – USD down

Published on  Thursday 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.

Nonfarm Employment Change was outstanding in May, jumping to  280 thousand, compared to just 223  thousand a month earlier. This reading  crushed the  estimate of 222 thousand. However, the markets are expecting a sharp drop in the June report, with a forecast  of 231 thousand. Will the indicator repeat and beat the estimate for the upcoming release?

Sentiment and Levels

The high-stakes poker game between Greece and its creditors has reached feverish proportions, as the markets and the euro continue to move on every new development, whether real or not. If  a  deal is hammered out, a relief  rally could be short lived as the markets will likely refocus on monetary policy divergence. The ECB is still printing euros and has no plans to stop it, while data continues improving in the US, and the FOMC may be slightly more hawkish than perceived So, the overall sentiment  remains  bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.1370, 1.1290, 1.1190, 1.1113, 1.1050 and 1.0910.

5 Scenarios

  1. Within expectations: 228K to 234K. In such a scenario, the EUR/USD is likely to rise within  range, with a small chance of breaking higher.
  2. Above expectations: 235K 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:  223K to 227K: A  weaker reading  than forecast could result in EUR/USD breaking above one resistance line.
  5. Well below expectations: Below 223K. 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.