Stronger wage growth tonight would suggest the uptrend of labour data is sustained. This would support the cause for monetary tightening by Fed. Short EUR/USD if wage growth surpasses forecast.
It is almost widely expected that job growth will be slower this month after an extraordinary boost of 304k in January. Therefore, there is a very good chance of it being revised lower due to the government shutdown.
- Even though ADP reported weaker job growth, we feel that as long as job growth is more than 170k, it is actually good enough for the dollar bulls.
- According to the Fed’s Beige Book, a number of districts reported a tighter labour market and notable shortage in workers. This could mean that wage growth could pick up in February.
- We feel that unemployment rate will remain unchanged at 5.8%.
- The reason why we are looking at a EUR/USD short if NFP were to surprise the market is due to the historical level that this pair is hovering around which is 1.1200. With a strong NFP, it could cause EUR/USD to break 1.1200 strongly, opening doors to 1.110 and 1.100 easily.
Fullerton Markets Research Team
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