US jobs report overview
Friday's US economic docket highlights the release of keenly watched US monthly jobs report, popularly known as NFP. The report is scheduled to be released at 1230GMT and is expected to show that the US economy added 190K new jobs during the month of July, down from previous month's reading of 213K.
Meanwhile, the unemployment rate is seen ticking lower to 3.9% from 4.0% in June and anticipated to hold steady at an 18-year low level of 3.8% and average hourly earnings, which have gained more traction in the recent past, are expected to remain at the same pace of 2.7% y/y.
Deviation impact on EUR/USD
Readers can find FX Street's proprietary deviation impact map of the event below. The reaction to a relative deviation of -0.9775 or less, the pair could go up reaching a range of 47-pips in the first 15-minutes and 116-pips in the following 4-hours.
Alternatively, a relative deviation of +1.4699 or higher could drag the pair lower by around 36-pips in the first 15-minutes and 64-pips in the following 4 hours.
How could the data affect EUR/USD?
Yohay Elam, FXStreet's own Analyst writes: "Immediate support is at 1.1575 which is the low point in July. Further down, the 2018 trough at 1.1508 could halt the pair. Below these levels, 1.1471 is a level dating back to July 2017."
"On the topside, we find 1.1620 which supported the pair in late July and now switches to resistance. 1.1665 is the next level to watch after it separated ranges in late July and is also the 200 Simple Moving Average on the 4-hour chart. 1.1720 is a weak resistance line before the four-time cap at 1.1750, he added further."
Key Notes
• Non-Farm Payrolls preview: Watching wages, USD well positioned to ride higher
• How to trade the US NFP with EUR/USD
• EUR/USD off 5-week lows, heads back towards 1.1600 ahead of NFP
About the US monthly jobs report
The nonfarm payrolls released by the US Department of Labor presents the number of new jobs created during the previous month, in all non-agricultural business. The monthly changes in payrolls can be extremely volatile, due to its high relation with economic policy decisions made by the Central Bank. The number is also subject to strong reviews in the upcoming months, and those reviews also tend to trigger volatility in the forex board. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish), although previous months reviews and the unemployment rate are as relevant as the headline figure, and therefore market's reaction depends on how the market assets them all.
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