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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 slid to 156 thousand in the December report, well short of the estimate 175 thousand. The markets are forecasting a strong turnaround in January, with an estimate of 170 thousand. Will the indicator rebound as expected?

Sentiment and Levels

There were no surprises from the Federal Reserve on Wednesday, which maintained rates and said that the economy continues to expand at a moderate rate. So, the overall sentiment  is neutral on EUR/USD towards this release.

Technical levels, from top to bottom: 1.10, 1.0950, 1.0870, 1.0775, 1.0710 and  1.0650

5 Scenarios

  1. Within expectations: 167K to 173K. In such a scenario, the EUR/USD is likely to rise within  range, with a small chance of breaking higher.
  2. Above expectations: 174K to 178K: An unexpected higher reading could  push the pair  below one support  line.
  3. Well above expectations: Above 178K: Such an outcome could  push the pair lower and two or more  support lines could  fall as a result.
  4. Below expectations:  162K to 166K: A weak reading could  result in  EUR/USD breaking above one resistance line.
  5. Well below expectations: Below 162K. A very soft reading could result in the pair  breaking above  two or more resistance lines.

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