Selling EURUSD if US non-farm payrolls rise above 280K

Today the last report of the year on the US government labor market will be released.

This document was preceded on Wednesday and Thursday by the leading, but limited in content, ADP National Employment Report and weekly Initial Jobless Claims data.

The ADP report showed a significant increase in employment. The value rose by 233 thousand people despite expectations of a slowdown.

Initial Jobless Claims decreased from September's value of 228 thousand to 216 thousand, while a slight increase in the number of applications was expected.

The number of layoffs also decreased from the previous value of 72.8 thousand to 55.6 thousand.

We can see that the labor market showed strength despite expectations of a moderate decline.

If we pay attention to the changes in labor costs, no significant shifts were recorded. The labor cost index for Q3 declined from 0.9% to 0.8%.

Supplemental employee benefits also declined from the previous level of 1.0% to 0.8%.

Thus, job growth has yet to manifest itself in rising wages. Risks of additional upward inflationary pressures from consumer spending are still limited.

What will today's nonfarm-payrolls data be like?

It’s likely that the government report will match the result from ADP. It should be recalled that the September value amounted to 254 thousand, and the forecast for October is a change of 108 thousand people, which is one and a half times less.

If the change in employment in the US non-farm sector in October will be more than 280 thousand people, it will give a strong short-term impetus to the decline in EURUSD.

From a technical point of view, this means that EURUSD may retest its local low at 1.0750 in such a scenario.

The final recommendation is to sell EURUSD, if the change in the US non-farm payrolls for October is more than 280 thousand people.

The profit could be fixed at the level of 1.0750. The Stop loss could be placed at 1.0950.

The volume of the opened position should be set so that the value of a possible loss, defined with a protective stop order, doesn’t exceed 1% of your deposit.