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 popularly known NFP report is scheduled for release at 13:30 GMT and is expected to show that the economy added 550K new jobs in November, up from 531K in the previous month. The unemployment rate is expected to edge lower to 4.5% from 4.6% in October. Given Wednesday's stronger US ADP report on private-sector employment, market participants have turned more optimistic about the official figures.

According to Joseph Trevisani, Senior Analyst at FXStreet: “The November payroll report stands a good chance of performing better than forecast. Signs from the labor market and consumer economy point to a continued recovery in the United States.”

How could the data affect EUR/USD?

Against the backdrop of stubbornly high inflation, a stronger than expected headline NFP would further fuel speculations about a more aggressive policy tightening by the Fed. This would result in higher US Treasury bond yields and a stronger US dollar. Conversely, a weaker print – though seems unlikely – is likely to offset by the fact that the Fed has acknowledged a sufficient labor market recovery to permit higher interest rates. This, in turn, suggests that the path of least resistance for the USD is to the upside and down for the EUR/USD pair.

Meanwhile, Eren Sengezer, Editor at FXStreet, offered a brief technical outlook for the major: “The Relative Strength Index (RSI) indicator on the four-hour chart retreated below 50, suggesting that sellers look to retain control of EUR/USD.”

Eren also outlined important technical levels to trade the EUR/USD pair: “At the time of press, the pair was testing 1.1290 (Fibonacci 23.6% retracement of November downtrend). The 50-period SMA aligns as the next support at 1.1280 and additional losses could be witnessed toward 1.1235 (Tuesday low) in case that level turns into resistance.”

“The bearish pressure could weaken if bulls reclaim 1.1320 (100-period SMA, 20-period SMA). 1.1350/60 area (static level, Fibonacci 38.2% retracement) could be seen as the next resistance,” Eren added further.

Key Notes

  •  Nonfarm Payrolls Preview: Jobs’ headline could be a make it or break it in tapering’s decision

  •  US Nonfarm Payrolls November Preview: Can we agree the labor market is healing?

  •  EUR/USD Forecast: Euro to continue to weaken as long as 1.1320 resistance holds

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.