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 blockbuster headline print in July. The economy likely added 870K new jobs in July, enough to push the jobless rate lower to 5.7% from 5.9% in June. That said, the disappointing ADP report on the US private-sector employment might have forced investors to scale back their expectations from the official figures.

Meanwhile, analysts at Deutsche Bank sounded more optimistic and explained: “We are forecasting that NFP will have risen by +1M in July, which would be the fastest pace of job growth since last August. And in turn, we see that bringing the unemployment rate down to a post-pandemic low of 5.6%. July is a seasonally weak month for hiring so the seasonal adjustment is strong. In a year as unusual as this there is high uncertainty as to what impact the seasonals will actually have. So it’s clear that the margin for error could be high.”

How could the data affect EUR/USD?

Ahead of the key release, the US dollar was supported by Fed Vice Chair Richard Clarida hawkish comments earlier this week. A stronger report will further fuel speculations that the Fed will begin tightening its monetary policy sooner than anticipate and provide an additional boost to the greenback.

Conversely, a weaker reading could add to concerns about the potential economic fallout from the fast-spreading Delta variant of the coronavirus. This, in turn, could weigh on investors' sentiment and drove some haven flows towards the greenback, suggesting that the path of least resistance for the EUR/USD pair remains to the downside.

Meanwhile, FXStreet's own Analyst, Yohay Elam, offered a brief technical outlook for the major: “Euro/dollar has slipped toward 1.18, the lowest level in over a week. It has begun setting lower lows after recording lower highs earlier in the week. Moreover, momentum on the four-hour chart has turned to the downside and the pair is about to slip below the 100 Simple Moving Average.”

Yohay also offered important technical levels to trade the EUR/USD pair: “Support awaits at the daily low of 1.1820. It is followed by the swing low of 1.1775 recorded last week and then by the July low of 1.1750. Close by, 1.1740, 1.1717 and the round 1.17 level are the next lines to watch – all played a role early in the year. Resistance is at 1.1860, which was the peak of a recovery attempt this week. It is followed by 1.1910, the July high, and then by 1.1945 and 1.1975.”

Key Notes

  •  Nonfarm Payrolls Preview: Why the dollar could surge in (almost) any scenario

  •  NFP Preview: Forecasts from seven major banks for July jobs report, estimates vary more than usual

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

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.