US Nonfarm Payrolls report: December insights and market implications
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Summary
The December Nonfarm Payrolls (NFP) report is poised to shape the US Dollar's (USD) trajectory as markets analyze job growth, wage inflation, and unemployment data amid a cautious Federal Reserve (Fed) and incoming Trump administration policies.
December NFP: key expectations
The Bureau of Labor Statistics (BLS) will release the highly anticipated December NFP data on Friday, January 10, at 13:30 GMT. Economists predict:
Job Growth:
160,000 new jobs, a slowdown from November’s 227,000 gain, as the impact of hurricanes and the Boeing strike fades.
Unemployment Rate (UE):
Stable at 4.2%, reflecting steady labor market conditions.
Average Hourly Earnings (AHE):
Growth of 4% year-over-year, mirroring November’s pace, signaling consistent wage inflation.
Market sentiment: Fed’s caution and Trump’s policies
The Fed remains cautious following its December meeting, with policymakers signaling slower interest rate cuts amid uncertainty around Trump’s proposed trade and immigration policies. Inflation concerns, stoked by potential tariffs, could shape future monetary policy.
Potential NFP market impact
Below-expected data:
A headline figure below 100,000 jobs could spark USD selling, raising doubts about the Fed’s hawkish stance. In such a scenario:
EUR/USD outlook:
The pair could rebound toward 1.0450, benefiting from a weaker USD.
Above-expected data:
Stronger job growth and wage inflation figures would reinforce the Fed’s cautious rate cut approach, boosting the USD.
EUR/USD outlook:
The pair may decline below 1.0250, marking its lowest level in over two years.
EUR/USD technical analysis
Resistance levels:
1.0391: 21-day Simple Moving Average (SMA)
1.0437: January 7 high
1.0510: 50-day SMA
Support levels:
1.0224: two-year low
1.0150: psychological barrier
Technical indicators, including the 14-day Relative Strength Index (RSI), suggest a bearish bias with downside risks prevailing unless key resistance levels are breached.
Conclusion
The December NFP report will play a critical role in determining the USD’s near-term outlook. Traders should prepare for heightened volatility in response to job growth, unemployment, and wage data, with broader implications for EUR/USD and other major currency pairs.
The December Nonfarm Payrolls (NFP) report is poised to shape the US Dollar's (USD) trajectory as markets analyze job growth, wage inflation, and unemployment data amid a cautious Federal Reserve (Fed) and incoming Trump administration policies.
December NFP: key expectations
The Bureau of Labor Statistics (BLS) will release the highly anticipated December NFP data on Friday, January 10, at 13:30 GMT. Economists predict:
Job Growth:
160,000 new jobs, a slowdown from November’s 227,000 gain, as the impact of hurricanes and the Boeing strike fades.
Unemployment Rate (UE):
Stable at 4.2%, reflecting steady labor market conditions.
Average Hourly Earnings (AHE):
Growth of 4% year-over-year, mirroring November’s pace, signaling consistent wage inflation.
Market sentiment: Fed’s caution and Trump’s policies
The Fed remains cautious following its December meeting, with policymakers signaling slower interest rate cuts amid uncertainty around Trump’s proposed trade and immigration policies. Inflation concerns, stoked by potential tariffs, could shape future monetary policy.
Potential NFP market impact
Below-expected data:
A headline figure below 100,000 jobs could spark USD selling, raising doubts about the Fed’s hawkish stance. In such a scenario:
EUR/USD outlook:
The pair could rebound toward 1.0450, benefiting from a weaker USD.
Above-expected data:
Stronger job growth and wage inflation figures would reinforce the Fed’s cautious rate cut approach, boosting the USD.
EUR/USD outlook:
The pair may decline below 1.0250, marking its lowest level in over two years.
EUR/USD technical analysis
Resistance levels:
1.0391: 21-day Simple Moving Average (SMA)
1.0437: January 7 high
1.0510: 50-day SMA
Support levels:
1.0224: two-year low
1.0150: psychological barrier
Technical indicators, including the 14-day Relative Strength Index (RSI), suggest a bearish bias with downside risks prevailing unless key resistance levels are breached.
Conclusion
The December NFP report will play a critical role in determining the USD’s near-term outlook. Traders should prepare for heightened volatility in response to job growth, unemployment, and wage data, with broader implications for EUR/USD and other major currency pairs.