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 jobs data, popularly known as nonfarm payrolls (NFP). The report is scheduled to be released at 12:30GMT and is expected to show that the US economy shed a record 22 million jobs in April, marking the steepest plunge in payrolls since the Great Depression. The NFP report is also expected to show that the unemployment rate surged to 14%, shattering the post-World War Two record of 10.8% touched in November 1982.

How could the data affect EUR/USD?

The data will underscore the economic crisis caused by coronavirus-induced lockdowns. This comes on the back of speculations that the Fed will push interest rates below zero and will play a key role in driving the near-term market sentiment surrounding the US dollar. Nevertheless, the report is more likely to infuse fresh volatility in the FX market and produce some meaningful trading opportunities.

Meanwhile, Yohay Elam, Analyst Forex Crunch offered important technical levels to trade the EUR/USD pair: “Resistance is at the recent high of 1.0855, which is also where the 100 SMA hits the price. A stronger cap is 1.0890, which held the pair down in late April and converges with the 200 SMA. Further above, 1.0925 and 1.1975 await EUR/USD.”

“Support awaits at 1.0810, which provided support several times in April. It is followed by Thursday's low at 1.0765. April's trough of 1.0730 and 1.0640 are the next levels to watch,” Yohay added further.

Key Notes

   •   US Non-Farm Payrolls April Preview: Emotions or facts for the markets

   •   EUR/USD Forecast: Three reasons to rise ahead of horrible Non-Farm Payrolls, volatility set to leap

   •   EUR/USD Price Analysis: Looks neutral-bearish in the short-term

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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