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 are confidently expecting another excellent report in May. The economy likely added 650K new jobs in May, enough to push the jobless rate to 5.9% from 6.1% in April.
Meanwhile, analysts at Deutsche Bank sounded a little more optimistic about the report and explained: “We are expecting a bounceback in May, with a rise in Nonfarm payrolls of +800K, which in turn would see the unemployment rate decline to a post-pandemic low of 5.9%. We note that it’s also worth bearing in mind some of the distributional variables that the Federal Reserve are tracking, in addition to the main numbers, as they seek to achieve their maximum employment objective.”
How could the data affect EUR/USD?
Ahead of the key event risk, the US dollar remained well supported by Thursday's upbeat economic releases and dragged the EUR/USD pair to three-week lows. The data indicated that the US recovery is gathering pace and fueled speculations that the Fed may bring forward the timeline for tapering its bond purchases. A stronger NFP print will further derail the assumption that interest rates will stay low for a long time and provide a fresh lift to the greenback, setting the stage for an extension of the pair's ongoing downtrend.
Yohay Elam, FXStreet's own Analyst offered a brief technical outlook for the major: “Euro/dollar is suffering from downside momentum on the four-hour chart and has dropped below the 200 Simple Moving Average. However, the Relative Strength Index is nearing the 30 mark, and falling below that level would put the pair in oversold territory.”
Yohay also offered important technical levels to trade the EUR/USD pair: “Some support awaits at the daily low of 1.2105, followed by 1.2055, a cushion from mid-May, and then 1.2015, 1.20 and 1.1945. Some resistance is at the daily high of 1.2130, followed by 1.2160, 1.2175 and 1.22, which played a role in EUR/USD's trading in recent weeks.”
Key Notes
• US Nonfarm Payrolls May Preview: Questions, questions needing answers
• US May Nonfarm Payrolls Preview: Analyzing major pairs' reaction to NFP surprises
• EUR/USD Forecast: Sell the rumor, buy the fact? Why Nonfarm Payrolls could result in a bounce
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.