June 4th 2021
It’s non-farm payrolls Friday. We are expecting a number of about 600,000 new jobs added in May, but after April’s miss of the year, who can really accurately predict what today’s data will be.
For me, I’m starting to think that yesterday’s ADP Reported big gain of 978,000 jobs got the market reaction we should have had today. So to refresh the stronger dollar narrative NFP needs to be impressive.
An increase of 1M plus may be needed to get the markets moving in favour of the US Dollar. A number close to or just above expectations won’t cut it for me.
It’s all about the Jobs, according to the US Federal Reserve. We may see a big number today, and still be far from pre-pandemic employment levels, and even with a booming economy, we are many months from achieving full employment, which is a prerequisite for a change of monetary policy from the Fed.
The Feds mantra that inflation is transitory is still being repeated despite some FOMC members suggesting taper talk needs to start soon.
If today’s number is strong which we are expecting, it may not be strong enough to sustain the Dollar for long. US Dollar strength may be on the way in the future, but the market and the Fed will demand more data to confirm that a change in monetary policy is coming.
The current technical outlook finds resistance at 1.2150/60 and again at 1.2210/20, however, if the data seriously disappoints again resistance will be taken out and I think a retest of the high at 1.2260 is likely.
Although there is some light support at 1.2090/80 the Key support for me is at 1.2060/50 a break of this level will see a change to a more bearish EURUSD sentiment, and signal deeper losses to 1.2000 and 1.1960/50 in extension.