US Nonfarm Employment Change measures the change in the number of newly employed people in the US, excluding workers in the farming industry. A reading which is higher than the market forecast is bullish for the dollar. Here are the details and 5 possible outcomes for EUR/USD.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. The release of US Non-Farm Employment Change is highly anticipated by the markets, and an unexpected reading can have a substantial impact on the direction of EUR/USD.

Nonfarm Employment Change soared to  227 thousand in the January report, well above the estimate 170 thousand. The markets are expecting softer numbers in February, with an estimate of 185 thousand. Will the indicator repeat and beat the forecast?

Sentiment and Levels

The ECB left rates at 0.00% at the March policy meeting, and the central bank is not in any rush to tighten monetary policy. In the US, the Fed is expected to raise rates at next week’s meeting. So, the overall sentiment is bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.0727, 1.0660, 1.0630, 1.0520, 1.0490 and 1.0340

5 Scenarios

  • Within expectations: 181K to 189K. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
  • Above expectations: 176K to 180K: An unexpected higher reading could push the pair below one support line.
  • Well above expectations: Above 189K: Such an outcome could push the pair lower and two or more support lines could fall as a result.
  • Below expectations: 171K to 175K: A weak reading could result in EUR/USD breaking above one resistance line.
  • Well below expectations: Below 171K. A very soft reading could result in the pair breaking above two or more resistance lines.
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