When is the US monthly jobs report (NFP) and how could it affect EUR/USD?

US jobs report overview

Friday's US economic docket highlights the release of keenly watched US monthly jobs report, popularly known as NFP. The report is scheduled to be released at 1330GMT and is expected to show that the US economy added 165K new jobs during the month of January, down from the previous month's stellar reading of 312K.

Meanwhile, the unemployment rate is expected to hold steady at 3.9% and hence, the key focus will be on wage growth data, which have gained more traction in the recent past. Average hourly earnings are foreseen to post another month of solid growth, at 0.3% m/m, while the yearly rate is anticipated to remain steady at 3.2%. 

Deviation impact on EUR/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed, the reaction to the headline NFP print, in case of a relative deviation of -1.23 or +0.98, is likely to be in the range of 54-52 pips during the first 15-minutes and could stretch to 105-90 pips in the subsequent 4-hours.

How could the data affect EUR/USD?

Ahead of the key release, the pair has managed to recover a major part of the overnight retracement slide from near three-week tops and holding just above mid-1.1400s. Immediate resistance is pegged near 1.1475 horizontal zone and is closely followed by the 1.1500-1.1510 region, marking a descending trend-line, extending from Sept. 2018 swing high through Jan. monthly tops. 

On the flip side, 100-day SMA, around the 1.1445 region, now seems to protect the immediate downside and any subsequent retracement might prompt some additional long-unwinding trade, accelerating the fall further towards testing 50-day SMA support near the 1.1400-1.1390 region. A follow-through selling will negate any near-term positive bias and turn the pair vulnerable to aim towards testing sub-1.1300 level with some intermediate support near the 1.1360-55 area.

Key Notes

   •  US NFP Preview: 9 Major Banks expectations from January payrolls report

   •  EUR/USD Forecast: 3 reasons for not holding the highs as eyes focus on the NFP

   •  EUR/USD Technical Analysis: The 100-day SMA at 1.1440 holds the downside

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, and therefore the reaction depends on how the market asses them all.