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 December. The popularly known NFP report is scheduled for release at 13:30 GMT and is anticipated to show that the economy added 200K jobs during the reported month, down from the 263K in November. The upbeat ADP report on the US private-sector employment, however, might have lifted expectations from the official figures. The unemployment rate, meanwhile, is foreseen to hold steady at 3.7% in December. Apart from this, investors will take cues from Average Hourly Earnings for fresh insight into the possibility of any further rise in inflationary pressures.

How could the data affect EUR/USD?

Heading into the key data risk, some follow-through US Dollar buying drags the EUR/USD pair to a nearly one-month low, below the 1.0500 psychological mark. Surprisingly stronger US employment details should be enough to trigger a fresh leg up in the greenback.

Conversely, any disappointment is more likely to be overshadowed by looming recession risk, which might continue to underpin the safe-haven buck. This, in turn, suggests that the path of least resistance for the EUR/USD pair is to the downside.

Eren Sengezer, Editor at FXStreet, offers a brief technical overview and outlines important technical levels to trade the pair: “EUR/USD was last seen trading slightly above 1.0500, where the Fibonacci 50% retracement of the latest uptrend is located. In case the pair drops below that level and starts using it as resistance, it could extend its slide toward 1.0450 (Fibonacci 61.8% retracement) and 1.0400 (psychological level, static level).”

“On the upside, the 200-period SMA on the four-hour chart aligns as immediate resistance at around 1.0550. This level is also reinforced by the Fibonacci 38.2% retracement. With a four-hour close above that hurdle, EUR/USD could gather recovery momentum and target 1.0610/20 area (Fibonacci 23.6% retracement, 100-period SMA, 50-period SMA),” Eren adds further.

Key Notes

  •  Nonfarm Payrolls Preview: Layoffs spreading or another blockbuster month? Three scenarios for the US Dollar

  •  EUR/USD Forecast: Can 1.0500 support hold on another NFP beat?

  •  EUR/USD challenges the 1.0500 region ahead of key data

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.