Traders are watching for the upcoming US jobs report. This report will show the health of the labor market. It will also influence the Federal Reserve’s decision on whether to lower interest rates next month.
Economists predict that Nonfarm Payrolls increased by 50,000 jobs in September. This follows a small gain of 22,000 in August. The Unemployment Rate is expected to hold steady at 4.3%. Wages, known as Average Hourly Earnings, are forecast to rise 3.7% compared to a year ago.
Other analysts are more optimistic. One firm expects a stronger rebound of 100,000 new jobs. They also predict wage growth might slow slightly to 3.6% annually.
The US Dollar has recently gained strength. This has pushed the EUR/USD currency pair below the 1.1600 level. Recent comments from the Federal Reserve have made traders less certain about another interest rate cut in December. Policymakers are divided, worrying that lower rates could make inflation worse.
Recent economic data has been mixed. A report showed a large, sudden surge in corporate layoffs. Manufacturing activity also contracted more than expected. However, the services sector showed strength with a rise in new orders.
Because of these concerns, the jobs report is critical. A strong report with high job growth and a stable unemployment rate would likely push the US Dollar even higher. This could cause the EUR/USD pair to fall toward 1.1400. Good data would also make a December rate cut very unlikely.
From a technical perspective, the outlook for EUR/USD appears negative. The pair is trading below a key average, suggesting further declines are possible. The next significant support level is near 1.1470. If that breaks, the pair could fall toward 1.1395. For the trend to turn positive, the pair would need to climb back above 1.1574.
