When is the US monthly jobs report (NFP) and how could it affect EUR/USD?


US monthly jobs report overview

Friday's US economic docket highlights the release of the closely watched US monthly employment details, popularly known as NFP. The report is scheduled to be released at 12:30GMT and is expected to show that the US economy added 89K new jobs in October, down from the previous month's reading of 136K.
 
Meanwhile, the unemployment rate is expected to tick higher to 3.6% during the reported month but the key focus will remain on wage growth figures, which have gained more traction in the recent past. Average hourly earnings are foreseen to post strong growth of 0.3% on a monthly basis, versus a flat reading in the previous month, while the yearly rate is anticipated to rise to 3.0% from 2.9% reported in September.
 
“Based on the Markit PMI employment sub-index, we should expect a fairly weak job report in terms of job growth. We expect an increase of around 50,000 (which, however, is pulled down by a strike in General Motors, who are counted as unemployed in the job report),” explained Danske Bank analysts.

How could the data affect EUR/USD?

Yohay Elam, FXStreet's own Analyst offers important technical levels to trade the EUR/USD pair – “The currency pair is struggling with 1.1160, which was a swing high in late October. Resistance awaits at 1.1180, which was the peak last month and the highest level since the summer. Next, we find 1.1230, a stubborn cap from August. It is followed by 1.1250, which held EUR/USD down earlier that month. The next levels to watch are 1.1320 and 1.1390.”
 
“Support awaits at 1.1130, which provided support on Thursday. It is followed by 1.1095, which was a swing low last week. It is closely followed by 1.1070 – a double bottom created in recent days. Next, we find 1.1035, which capped EUR/USD on the way up and converges with the 200 SMA,” he added further.

Key Notes

   •   US Non-Farm Payrolls Preview: The trend remains the same
 
   •   EUR/USD Forecast: Well-positioned to resume the rally ahead of Non-Farm Payrolls
 
   •   EUR/USD Technical Analysis: a break above 1.1180 should pave the way for a test of the 200-day SMA

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 the reaction depends on how the market asses them all.

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