The April U.S. Non-Farm payroll report is expected to show the economy lost at least 600,000 jobs for the sixth straight month. Considering the estimate has steadily decreased as other indicators for the labor market have shown improvement then we could see the first print below 600,000 since November.
Fundamental Outlook
The April U.S. Non-Farm payroll report is expected to show the economy lost at least 600,000 jobs for the sixth straight month. Considering the estimate has steadily decreased as other indicators for the labor market have shown improvement then we could see the first print below 600,000 since November. Indeed, initial jobless claims fell to 601,000 which were the lowest number since the third week of January and private sector job losses fell below 500,000 according to the ADP report. If the U.S. labor report follows suit then we could see a jump in risk appetite and dollar weakness as investors sell off U.S. Treasuries. This would validate the bullish EUR/USD technical outlook which is calling for a move above 1.3742.
Technical Outlook
Bullish structure has held and the EURUSD is breaking to new highs. Price is approaching the 200 day SMA but there is no chart resistance until 1.3586. Keep risk to 1.3251 although at this point, price should not come near that level. In the event of a setback, 1.3350-1.3390 is potential support. The objective remains above 1.3742 and in the 1.4100-1.4200 area.
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To discuss this report contact John Rivera, Currency Analyst: [email protected]
