US Nonfarm Payrolls (NFP) Preview - NFP date: Friday 02 June 2023, Time: 12:30 UTC
Commentary:
- EUR/USD is down 2.78%, gold down 2%, and US100 up 11.6% over the past 30 days
- Current US jobs market is strong, and there’s a likely positive outcome for a US debt deal. Could the USD strengthen even further?
Nonfarm payrolls key data to watch:
| Time/UTC | Country | Indicator | Previous | Forecast |
|---|---|---|---|---|
| 12:30:00 PM | United States | Nonfarm Payrolls (NFP) | 253,000 | 180,000 |
| 12:30:00 PM | United States | Private Payrolls | 230,000 | 160,000 |
| 12:30:00 PM | United States | Unemployment Rate | 3.4% | 3.5% |
| 12:30:00 PM | United States | Average Hourly Earnings, m/m | 0.5% | 0.3% |
| 12:30:00 PM | United States | Average Workweek, All Workers | 34.4 hours | 34.4 hours |
What could move the US dollar on NFP day?
- Higher job creation above the 180K forecast could strengthen the USD
- Below the 180K could weaken the USD
Source: May 29 2023 12:20 UTC
NFP for May 2023 is expected to show a decrease in job growth month on month
The unemployment rate for May 2023 is expected to increase by 0.1%, pushing up unemployment from 3.4% to 3.5%. The fact is that even if there is a sharper increase in the unemployment rate, the current labour conditions remain very strong.
Source: May 29 2023 12:23 UTC
US average hourly earnings surprised towards the upside during April, moving forward, analysts are forecasting average hourly earnings to have grown by 0.3% for May 2023.
US hourly earnings have been holding firm, increasing the risk for inflation to remain higher for longer.
Source: May 29 2023 12:26 UTC
Trading commentary
EUR/USD further downside towards 1.0316?
- EUR/USD remains under downside pressure. Current price is below its 10 week moving average (bearish). The short term price break below the previous support of 1.094, now a key resistance, seems to be building the case for further downside move. Key support spotted near 1.0316 while upside risk above the 1.094s could trigger a further move towards 1.1240 and restart the September - May uptrend. See chart 1.
Chart 1 EUR/USD Source: May 29 2023 12:41 UTC
Gold scope for further downside
- Current Gold price $1,949 is bearish since price is below a valid multi-week downtrend line (see chart 2). The failure of price to hold above the $1,976 support level reinforces the prospects for a deeper price correction lower for a test of the $1,900 - $1,905 area. Upside risk seen above $1,976 which a move above could signal a resumption of the March - May uptrend, opening the path for another attempt at the all-time highs near $2,075.
Chart 2 Gold Source: May 29 2023 12:52 UTC
US100 index scope for further upside
- US100 current price 14,343 and appears to be trending higher within the multi-month upward price channel (see chart 3). Technical price conditions could support the case for a prospective further advance towards the 14,810s provided price remains above the 13,323 lower support (see chart 3).
Chart 3 US 100 Index Source: May 29 2023 1:03 UTC
Bottom line: regardless if the May US NFP data surprises towards the upside or downside, the current US job market remains robust enough to support the case for an even stronger US dollar. Higher average employee earnings could also help support US consumer spending, keeping the gate open for even higher US stock markets.
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