Nonfarm Payroll preview: get ready for a US employment disappointment

It's time again for the US to realease its jobs monthly data. This Friday, the March figures will be out, and the  US economy is expected to report another month of solid growth, although less impressive than February's 313K. For March, the economy is expected to have added 190K new jobs, while the unemployment rate is seen thinking down to 4.0% from the previous 4.1%. Average hourly earnings are foreseen to have increased 0.2% MoM and 2.7% YoY, this last being closely watched amid its relation with inflation, as higher wages usually imply increasing inflationary pressures, and that's what the Fed needs to pull the trigger at a faster pace.

The general consensus that points to a strong figure in job's creation comes as a result of recent data, as during February, the country added 313,000 jobs, while the previous two months were revised up by a total of 54K. Additionally, the ADP survey on jobs' creation in the private sector released earlier this week printed an encouraging 241K, surpassing market's estimate of 205K, with the largest contribution coming from the services sector, which added 176K new jobs out of that 241K total.  

However, data released this Thursday has been quite disappointing, with the US reporting that the number of job cuts increased from 35,369 in February to 60,357  in March.  Also, and for the week ending March 31st, the number of people applying for unemployment benefits increased by 24,000 to 242K, while the previous week was revised higher by 3,000. Is probable that February numbers have set the bar too high for what March has to offer.

This Friday will have an extra, that is, Fed's President Powell speaking later in the day. Powell will speak about the economic outlook at the Economic Club of Chicago, and audience questions are expected, although he is unlikely to say anything groundbreaking. Most possible, he will reiterate the stance offered during March's monetary policy meeting, when despite rising rates, the dot-plot remained unchanged with two more hikes in the docket for this year.

In the meantime, political noise has been quite loud as of lately, with the poisoning of a former Russian spy in the UK resulting in multiple Western nations expelling Russian diplomats, and this last retaliating by doing the same. Also, the US President´s decision to impose tariffs on steel and aluminum escalated to a trade-war between the country and China, with both imposing multiple tariffs on multiple products from their rival, and menacing with more to come.

The trade war has put investors on their toes this week, but somehow receded on Wednesday, as it scaled that far that investors now believe that it could all end in nothing, with both economies scaling back their decisions. Anyway, risk sentiment is a double edge knife that can strike one way or the other without warning.

EUR/USD levels to watch

The EUR/USD pair has been trading in a well-limited range for over a month, stuck around the 1.2300 region, as political woes keep uncertainty high, and investors cautious. The NFP report has to be really impressive to trigger some interesting moves, enough to take it out of its recent range. The pair is trading at its lowest since March 1st when it surged from 1.2154, but with a well-limited upward potential, according to technical readings in the daily chart, in where the pair is grinding lower below its 20 DMA, while the RSI indicator reaches new lows around 43. In the same chart, the Momentum indicator is neutral, amid the absence of a clear trend, while the 100 DMA offers a dynamic support at around 1.2200, the first one, ahead of the mentioned March 1st low. A more relevant one comes at 1.2100, where the pair established yearly highs in 2015 and 2017. To the upside, the 1.2300 figure is the immediate resistance, followed by the 1.2340 price zone, where the pair found sellers this week, followed by the 1.2370/80 region. Seems unlikely the pair could break above this last, but if it does, 1.2410 is the next probable bullish target.