EUR/USD forecast after the mixed US NFP data

By: Crispus Nyaga
Crispus Nyaga
Crispus is an active trader, where he is followed and copied at Capital.com. He lives in Nairobi with his… read more.
on Dec 5, 2021
  • The EUR/USD reacted mildly to the latest US non-farm payrolls data.
  • The numbers showed that the US economy added 210k jobs.
  • Focus shifts to the latest US inflation data.

The EUR/USD is moving sideways as the market reflect on the latest US non-farm payrolls (NFP) data and the hawkish statement by Jerome Powell. The pair is trading at 1.1310, which is above last month’s low at 1.1180.

US nonfarm payrolls

The Bureau of Labor Statistics (BLS) published the latest US jobs numbers on Friday. These numbers were relatively bad but there were some bright spots. The American economy added just 210k jobs in  November. This was a sharp decline from the previous month’s 546k. It was also lower than the median estimate of 550k and the ADP figure of more than 500k.

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These numbers send a difficult picture for the American economy. For example, initial jobless claims have dropped to where they were before the pandemic started. At the same time, the number of resignations has jumped to a record high while the economy has more than 10 million vacancies. 

Further data revealed that the country’s wages remained unchanged at 4.8%. This was slightly lower than the median estimate of 5.0%. On a positive side, the average weekly hours rose to 34.8 while the unemployment rate declined from 4.6% to 4.2%. This was the best figure since the pandemic started.

The EUR/USD also reacted mildly to the positive US non-manufacturing PMI data. According to the Institute of Supplier Management (ISM), the PMI jumped from 66.7 to 69.1 in November. This was the highest level in months. Still, there are concerns about the impact of the Omicron variant on the services sector.

Later this week, the EUR/USD pair will react to several key economic numbers. On Tuesday, Eurostat will publish the latest EU GDP numbers. Still, these being the second estimate, the impact will be relatively muted. 

The most important catalyst for the EUR/USD pair will be the latest US consumer inflation data scheduled for Friday. Analysts expect the data to show that the headline CPI jumped to 6.7% in November.

EUR/USD forecast

EUR/USD

The hourly chart shows that the EUR/USD pair has been moving sideways in the past few weeks. The pair is now trading between the pivot point and the first resistance. It is also oscillating along the 50-hour and 25-hour moving averages

Therefore, I suspect that the pair will remain in this range as the market reflects on last week’s hawkish statement by Jerome Powell and the upcoming US inflation data.

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