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, popularly known as NFP. The report is scheduled to be released at 13:30GMT and economists are expecting to see a more modest gain in November. Consensus estimates point to an addition of 469K new jobs during the reported month, down from October's reading of 638K. Meanwhile, the unemployment rate is anticipated to edge lower to 6.8% from 6.9% recorded in October. Average hourly earnings are estimated to show a modest rise of 0.1% MoM and increased 4.3% on yearly basis as compared to 4.5% previous.

How could the data affect EUR/USD?

The recent optimism over the rollout of a vaccine for the highly contagious coronavirus disease and prospects for more US fiscal stimulus has kept the US dollar under extreme pressure. Investors also seem convinced that the Fed will expand its bond-buying program in December further undermined the greenback and pushed the EUR/USD pair to its highest level since April 2018. This, in turn, suggests that the reaction to Friday's jobs report is more likely to be limited, unless we see a massive divergence from the expected numbers.

As Joseph Trevisani, Senior Analyst at FXStreet explains: "Currency markets have treated the improving pandemic and economic news as a continuation of the risk-on dollar lower theme of the last eight months. If NFP is better than predicted, it will enhance that view, if not it will be ignored. The dollar is in the unusual place of standing to be damaged by good US economic news."

Meanwhile, Yohay Elam, FXStreet's own Analyst offered a brief technical outlook for the EUR/USD pair: "The Relative Strength Index on the four-hour chart remains in overbought territory, a situation that is usually unsustainable – and could trigger a substantial downside correction."

Yohay also provided important technical levels to trade the major: "Resistance awaits at the new 32-month high of 1.2172, followed by the round 1.22 level which also played a role in 2018. The next level to watch is 1.2250. Support is at 1.2125, which temporarily capped EUR/USD on Thursday, followed by 1.2080, a peak seen earlier in the week, and then by 1.2045, a support line."

Key Notes

   •  Nonfarm Payrolls Preview: Another dollar’s disappointment underway

   •  US Nonfarm Payrolls November Preview: Orders now, hiring to come

   •  EUR/USD Forecast: Next stop 1.22? Not so fast, five reasons for a fall on Nonfarm Payrolls day

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.