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 report is scheduled to be released at 12:30 GMT and market participants are expecting another excellent headline print in June. The economy likely added 700K new jobs in June, enough to push the jobless rate lower to 5.7% from 5.8% in May.

Analysts at Goldman Sachs offer a sneak peek at what to expect from the US Nonfarm Payrolls (NFP): “We estimate nonfarm payrolls rose 750k in June. Coupled with very strong labor demand and continued progress on vaccinations and reopening, we believe job growth probably picked up further in the month. We estimate a two-tenths drop in the unemployment rate to 5.6%, reflecting a strong household employment gain but a further rise in the participation rate.”

How could the data affect EUR/USD?

Ahead of the key event risk, the EUR/USD pair fell to near three-month lows, around the 1.1820 region, amid sustained US dollar buying interest. An upbeat reading – now a more likely scenario following this week's upbeat ADP report and initial jobless claims – will reaffirm hawkish Fed expectations. This should provide an additional boost to the already stronger greenback and pave the way for an extension of the pair's ongoing downward trajectory.

Conversely, a softer print will give investors an excuse to take some profits off the USD long positions and provide a much-needed respite to the major. That said, worries about the spread of the more contagious Delta variant of the coronavirus might continue to act as a tailwind for the safe-haven USD. This, in turn, suggests that the path of least resistance for the pair remains to the downside.

Meanwhile, FXStreet's own Analyst, Yohay Elam, offered a brief technical outlook for the major: “Euro/dollar continues suffering from downside momentum on the four-hour chart and trades below the 50, 100 and 200 simple moving averages. However, the Relative Strength Index (RSI) is nearing the 30 level once again – thus being close to oversold conditions.”

Yohay also offered important technical levels to trade the EUR/USD pair: “Some support is at the daily bottom of 1.1835, which is also the lowest since June. It is followed by 1.1820, a resistance line from April. Further down, 1.1780 and 1.1740 await the pair. Resistance is at 1.1880, followed by 1.1910, and then by 1.1950 and 1.1950 – all capped EUR/USD on its way down in the past week.”

Key Notes

  •  NFP Preview: Four reasons why June's jobs report could be a dollar downer

  •  US June Nonfarm Payrolls Preview: Analyzing major pairs' reaction to NFP surprises

  •  EUR/USD Forecast: Why Nonfarm Payrolls could trigger a much-needed upside correction

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.