US monthly jobs report overview
Friday's US economic docket highlights the release of the closely watched US monthly jobs data, popularly known as NFP. The report is scheduled to be released at 12:30GMT and is expected to show that the US economy added 1.6 million jobs in July, far lower than the previous month's reading of 4.8 million. Meanwhile, the unemployment rate is anticipated to have edged lower to 10.5% from 11.1% recorded in June.
How could the data affect EUR/USD?
A disappointing reading will further fuel concerns about the US economic recovery could be stalling again due to the country's poor performance in containing the coronavirus outbreak. This, in turn, will prompt some fresh selling around the USD and set the stage for an extension of the EUR/USD pair's recent bullish run witnessed over the past one month or so.
Meanwhile, a stronger-than-expected reading might provide some respite to the USD bulls, albeit might still not be enough to change the well-established bearish trend. Hence, any immediate reaction to the upbeat report is more likely to remain short-lived, instead fizzle out rather quickly.
Meanwhile, Yohay Elam, FXStreet's own Analyst provided important technical levels to trade the EUR/USD pair: "Resistance awaits at 1.1850, which provided some support when EUR/USD traded on higher ground. It is followed by the 1.1909-1.1916 area – combining July's and August's peaks. The next level is the psychologically significant 1.20. Support awaits at the daily low of 1.1820, followed by 1.1780, which was a stepping stone on the way up. Next, 1.1730 and 1.17 provide support."
Key Notes
• Nonfarm Payrolls Preview: Hints point to an awful July
• US Non-Farm Payrolls July Preview: A dual track labor market or imperfections in the data?
• EUR/USD Forecast: Are bulls still in control? Highly uncertain Non-Farm Payrolls to determine
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.
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