Traders are preparing for more volatility in the sessions ahead today with a particular focus on the key employment data due out in the United States. The non-farm payroll number will be the headline that everyone will be looking at, but the other components released at the same time will have equal weighting over the longer-term.
Expectations for tomorrow’s data prints are:
- Non-Farm Employment Change – 186k
- Average Hourly Earnings m/m – 0.3%
- Unemployment Rate – 3.9%
Two key employment data results this week have already had a significant impact on the market, with both the JOLTS Job Openings data and the ADP Non-Farm Employment Change both coming in weaker than expected. The market is now pricing in a 69% chance of a rate cut in September and we have seen strong moves again in stocks as investors have priced in that earlier easing from the Fed.
If we could see the trifecta of a weaker NFP print as well as the other two key monthly updates which are already in the bag, then investors are likely to jump even harder in those growth stocks and we could see even more records in US indices. Yields are likely to fall under pressure as well as the dollar and it should present some really good trading opportunities in currencies, especially with some of the majors sitting near key support levels in the dollar.
Euro in particular, could break into a fresh topside range if we see a weak result; it is sitting just beneath a key resistance trendline on the Daily chart and fi that level breaks it could then swiftly challenge the yearly high just under the key psychological level at 1.1000. Conversely a stronger than expected print could really throw the cat amongst the pigeons and would see the Euro drop back into recent ranges as US yields gain back some of their recent lost ground.
Resistance 2: 1.0985 – 2024 High
Resistance 1: 1.0947 – Trendline Resistance
Support 1: 1.0787 – 200-Day Moving Average
Support 2: 1.0699 – Trendline Support
