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. The report is scheduled to be released at 12:30 GMT and economists anticipate another blockbuster NFP print, showing that the economy added 978K new jobs in April. This would mark the strongest reading in the last eight months, enough to push the jobless rate to 5.8% from 6.0% in March.

Meanwhile, analysts at TD Securities are not very optimistic about the report and explained: “Payrolls probably surged again, helped by fiscal stimulus and an easing of COVID-19 restrictions, albeit not quite to the same degree as in March (916K). We expect that NFP increased by 875K in April, with the caveat that uncertainty about seasonal adjustment raises the potential for surprise. The unemployment rate likely fell again.”

How could the data affect EUR/USD?

Investors have been pricing in the prospects for a relatively faster US economic recovery amid the ultra-lose monetary/fiscal policies and the impressive pace of vaccinations. Moreover, the Fed has repeatedly assured to maintain its accommodative policy stance deeper into the recovery, suggesting that upbeat jobs data alone may not trigger any meaningful upside for the US dollar.

Hence, any immediate market reaction to stronger than anticipated figures is more likely to be short-lived or do little to prompt any aggressive selling around the EUR/USD pair. Conversely, a softer reading could see the USD falling further and push the major further beyond the 1.2100 mark. Summing it up, the path of least resistance for the major remains up.

Yohay Elam, FXStreet's own Analyst offered a brief technical outlook for the major: “The four-hour chart is painting a mixed picture. While upside momentum has all but disappeared, the currency pair still trades above 50 Simple Moving Average (SMA). The Relative Strength Index is balanced.”

Yohay also offered important technical levels to trade the EUR/USD pair: “Support awaits at 1.2045, where the 100 SMA hits the price. It is followed by 1.2015, 1.1990 and finally by 1.1945. Resistance is at the daily high of 1.2070, followed by 1.2120 and by the April peak of 1.2150.”

Key Notes

  •  US Nonfarm Payrolls April Preview: When the economy booms, it's all about rates

  •  Nonfarm Payrolls Preview: Forecasts from eight major banks for April jobs report

  •  EUR/USD Forecast: Selling opportunity? Why Nonfarm Payrolls expectations could be too low

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.