EUR/USD Forex Forecast – US Non-Farm Payrolls Expected to Remain Strong

The Euro is trading higher against the U.S. on Friday, shortly before the key U.S. Non-Farm Payrolls report. Economists expect hiring remained strong in February and that wages grew even faster than they did in January.

At 12:55 GMT, the EUR/USD is trading 1.0596, up 0.0014 or +0.13%. On Thursday, the Invesco CurrencyShares Euro Trust ETF (FXE) is at $97.63, up $0.31 or +0.32%.

February’s employment report is expected Friday at 13:30 GMT. Economists forecast 225,000 new jobs were added in February, lower than January’s surprisingly strong 517,000 jobs, according to Dow Jones.

The unemployment rate is expected to hold steady at 3.4%. Average hourly earnings are forecast to rise by 0.4%, or 4.8% year over year. That is more than January’s 0.3% increase, or a 4.4% annualized rate.

NFP’s Potential Impact on EUR/USD

If the report is as expected, it will do little to quell concerns about high inflation and it could even increase the odds for a half-point rate hike from the Federal Reserve at its next policy meeting on March 21-22. Investors are also focused on whether there will be revisions to January’s startling report.

The futures market Thursday was pricing a nearly 54% chance of a 50 basis point increase. If these odds jump then look for the EUR/USD to weaken.

Daily EUR/USD Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.0524 will signal a resumption of the downtrend. Taking out 1.0695 will change the main trend to up.

The minor range is 1.0695 to 1.0524. Its pivot at 1.0610 is the first upside target. Following the target is a 50% level at 1.0661.

The nearest support is the Jan. 6 main bottom at 1.0483, followed by a long-term 50% level at 1.0381.

Daily EUR/USD Technical Forecast

Trader reaction to 1.0610 is likely to determine the direction of the EUR/USD on Friday.

Bearish Scenario

A sustained move under 1.0610 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into 1.0524, followed by 1.0483.

Taking out 1.0483 could trigger an acceleration into 1.0381.

Bullish Scenario

A sustained move over 1.0610 will signal the presence of buyers. This could trigger a surge into 1.0661, followed by the main top at 1.0695. This is a potential trigger point for an acceleration to the upside with 1.0783 the next target.