Nonfarm Payrolls Preview: Are you excited about it? We all are!

The monthly release of US employment figure has turned less spectacular lately, with the exception of May shockingly negative readings. The sector has been growing steadily for already two years, being the less of the concerns for the FED, which bases its decision of rising rates in employment and inflation levels. Basically, with a healthy job's sector, the problem for the Central Bank has been persistent low inflation.

But Janet Yellen's opening remarks at Jackson Hole have been quite a game changer in this scenario, as seems that policymakers are ready to pull the trigger, in spite of still subdued inflation. Things, however, are not that clear yet: many market analyst believe is way too bold to call for a rate hike in September, and that with luck, we will see one in December. That "luck" depends on how macroeconomic data coming from the US results during the upcoming weeks.

The greenback rallies on good news and retreats on bad ones, all based on hopes over such rate hike, which by the way, the FED promised a couple of years ago, and keeps us all hoping. That's why this time, the US Nonfarm Payroll report grabs more attention, and may result in a bigger market mover.

Market's expectations are of 180K new jobs added in July, which is around this 2016 average gain of 186K. Unemployment rate is expected to tick back lower to 4.8%, from previous 4.9%.  Year-on-year wages growth has fluctuated above 2% for the last four years, slowly grinding higher, but not enough to become a factor, when it comes to fueling consumption, and therefore inflation. In fact, and monthly basis, average hourly earnings are expected to have grown by 0.2% against previous 0.3%.

With headline employment creation and unemployment figures in line with expectations, market's attention will center in wages. Improvements there could be more motivating for dollar's bulls than a modest miss in added jobs. A generalized miss will dilute for good chances of a rate hike in September, and probably trigger a dollar's sell-off.

And what about the EUR/USD?

The EUR/USD pair is enjoying some modest recovery this Thursday, as quite disappointing PMI final August readings in the US put a halt to dollar's strength. The retracement is barely significant, as the pair is still well below the 38.2% retracement of its latest daily decline, and generally speaking technical readings in the daily chart lack enough upward potential to suggest a recovery, given that indicators hold within negative territory, whilst the price struggles around a modestly bearish 100 DMA and stands well below the 20 DMA.

The level to watch towards the upside is 1.1245, a strong static resistance, also the 50% retracement of the mentioned slide. Above it, the pair can recover up to 1.1300/20, en route to 1.1366, August high.

On the flip side, 1.1120 is still a major static support, with a break below it opening doors for a downward move towards 1.1040. A weekly close below this last level can see the pair extending down to 1.0960 at the beginning of the upcoming week.