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 for November. The popularly known NFP report is scheduled for release at 13:30 GMT and is expected to show that the economy added 200K jobs during the reported month, down from the 261K in October. The unemployment rate is anticipated to hold steady at 3.7% in November. Apart from this, investors will take cues from Average Hourly Earnings, which could offer fresh insight into the possibility of any further rise in inflationary pressures.

Analysts at Citibank are more optimistic and offer a brief preview of the important macro data: “We expect a solid 225K jobs added in November, reflecting a slowing but still-solid pace of job growth. Average hourly earnings should rise 0.3% MoM, a slightly softer increase than last month but with upside risks. Average hourly earnings have slowed in recent months relative to other, more carefully constructed wage measures such as the Atlanta Fed’s Wage Tracker and the Fed’s preferred Employment Cost Index. After a somewhat surprising increase in October, we expect the unemployment rate to drop to 3.6%.”

How could the data affect EUR/USD?

Ahead of the key release, the US Dollar plummets to over a five-month low in the wake of a dovish pivot by the Fed and assists the EUR/USD pair to hold steady above the 1.0500 psychological mark. Weaker US employment details should be enough to trigger a fresh leg down in the USD and provide an additional boost to the major.

In contrast, any positive surprise - though could offer a temporary respite to the USD - is likely to be overshadowed by expectations that the US central bank will slow the pace of its rate-hiking cycle. This, in turn, favours the USD bears and suggests that the path of least resistance for the EUR/USD pair is to the upside.

Eren Sengezer, Editor at FXStreet, offers a brief technical overview and outlines important technical levels to trade the EUR/USD pair: “The Relative Strength Index (RSI) indicator on the four-hour chart stays within a touching distance of 70, suggesting that the pair could stage a technical correction before the next leg higher. On the upside, interim resistance seems to have formed at 1.0540. In case buyers manage to flip that level into support, additional gains toward 1.0600 (psychological level, static level) and 1.0630 (static level) could be witnessed.”

“1.0500 (former resistance, psychological level) aligns as initial support. With a four-hour close below that level, sellers could take action and drag the pair toward the 1.0410/1.0390 area, where the 20-period and the 50-period Simple Moving Averages are located,” Eren adds further.

Key Notes

  •  Nonfarm Payrolls Preview: Dollar selling opportunity? Low expectations to trigger temporary bounce

  •  US NFP Preview: Forecasts from 10 major banks, less strong, but not weak

  •  EUR/USD Forecast: Euro to end week on strong note on weak NFP

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 month's reviews and the unemployment rate are as relevant as the headline figure.