One of the main drivers, and perhaps the most important one, for traders this week will be the next release of labor statistics from the United States this Friday. NonFarm Payrolls, Average Hourly Earnings, and Unemployment Rate will have a significant impact on the behavior of the US currency.
NonFarm Payrolls
Last data: 263K
Consensus forecast: 196K
The US employment market continues to be one of the strongest arguments of the administration of the current US President Donald Trump. Past numbers of 263K of new jobs, together with a 3.6% unemployment rate, have silenced even the most ardent opponents of his policies. This Friday, analysts are cautiously awaiting an indicator correction to 196K, although no one will be surprised if the release exceeds the wildest market expectations.
All preliminary indicators point to another strong release. The index of business activity in the US manufacturing sector, published by the Institute for Management Supply (ISM), showed a sub-component of employment of 53.7% in May, an increase of 1.3% compared with the April index. Although the PMI fell slightly from 52.8 to 52.1, the labor market in the manufacturing industry looked good steadily last month, which adds momentum to positive trends in the employment sector.
If this forecast is justified, then Forex market traders should expect an increase in the US dollar relative to all major competitors. In case of a significant excess of the predicted figures, strong volatility in the market is possible.
Average Hourly Earnings
Last data: 0.2%
Consensus forecast: 0.3%
We believe that on a monthly basis, the average hourly earnings will rise - to a level of 0.3%. The earnings component has become the main part of the workplace report since workers who earn more usually spend more, and this stimulates the economy. Given the general level of inflation in the United States at 2%, workers are currently feeling a real wage increase.
If this forecast is justified, then, together with good numbers on the number of new jobs, this will contribute to an even greater increase in the US dollar.
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Unemployment Rate
Last data: 3.6%
Consensus forecast: 3.6%
The unemployment rate in the United States remains at historic lows, and we believe that this trend will continue, taking into account all the other major fundamental indicators of the national economy. This time, most likely, the release will remain at the previous figures of 3.6%.
If this forecast is justified, then in combination with good numbers on NFP and wages, this can lead to a rally of the US currency.
Forex trading recommendations:
GBPUSD: Sell. Entry point – 1, 2690. Take Profit – 1, 2667. Stop Loss – 1, 2729.
AUDUSD: Sell. Entry point – 0, 6975. Take Profit – 0, 6961. Stop Loss – 0, 6999.
NZDUSD: Sell. Entry point – 0, 6632. Take Profit – 0, 6619. Stop Loss – 0, 6654.
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