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 nonfarm payrolls (NFP). The report is scheduled to be released at 13:30GMT and is expected to show that the US economy added 164K new jobs in December, down from the previous month's stellar reading of 266K.

The unemployment rate is expected to hold steady at 3.5% during the reported month and hence, 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 a growth of 0.3% on a monthly basis, versus the previous month's rise of 0.2%. The yearly rate is anticipated to show an increase of 3.0%, matching November's reading.

Meanwhile, analysts at Deutsche Bank attributed the November's bumper print to returning GM workers and forecast reading for 155K for December. “In light of the strong ADP report this week they also nudged their private payrolls forecast slightly higher, to 145k. As for the other details, our colleagues expect the unemployment rate to hold steady at 3.5%, hours worked to also hold steady at 34.4 and average hourly earnings to rise, +0.3% mom - all of which is in line with the wider consensus.”

How could the data affect EUR/USD?

“With central banks from Washington to Ottawa, London to Canberra on hold, economic statistics will be the determining factor for currencies. In that competition American labor production should soon return the gloss to the US dollar,” explains Joseph Trevisani, Senior Analyst at FXStreet.

Meanwhile, Yohay Elam, Senior Analyst at FXStreet, offered his take on the EUR/USD pair: “The Relative Strength Index on the four-hour chart is flirting with 30 – the line indicating oversold conditions. While the pair dropped below the 200 Simple Moving Average and momentum is to the downside, an upside correction cannot be ruled out.”

Yohay further provided important technical levels to trade the major: “Support awaits at 1.1090, which was Thursday's low, followed by the mid-December trough of 1.1065. Next, we find 1.10, a round number, and 1.0960. Resistance awaits at 1.1120, which EUR/USD down in recent days, followed by 1.1135, a swing low from early in the week. 1.1170 and 1.1205 were swing highs in early 2020.”

Key Notes

   •    US Non-Farm Payrolls December Preview: All systems go

   •    Nonfarm Payrolls Preview: New year, old data

   •    US NFP Preview: 8 Major Banks expectations from December payrolls report

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.