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.
In November, Nonfarm Employment Change jumped to 178 thousand, edging above the estimate of 177 thousand. The estimate for the December report stands at 175 thousand.
Sentiment and Levels
As we enter 2017, the US dollar continues to trade at high levels. On the fiscal side, high expectations for fiscal stimulus from Trump amid a sluggish growth rate in Europe are bullish for the US dollar. So, overall sentiment is bullish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.0690, 1.0570, 1.0520, 1.0460, 1.0340 and 1.0150
5 Scenarios
- Within expectations: 172K to 178K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 179K to 183K. An unexpected higher reading could push the pair below one support line.
- Well above expectations: Above 183K. Such an outcome could push the pair lower and two or more support lines could fall as a result.
- Below expectations: 167K to 171K. A weak reading could result in EUR/USD breaking above one resistance line.
- Well below expectations: Below 167K. 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.
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