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Nonfarm Payrolls Rise despite GE Strike

Nov 1 2019, 09:58 PM (BDT) |

The anticipated Nonfarm payrolls report that followed FED’s rate cut on Wednesday wasn’t a letdown! 128K jobs were created in October, which exceeds the forecast of 89K and the previous months’ reading was also revised from 136K to 180K.

Average hourly earnings remain the same level at 3% YoY, while monthly growth came out slightly below expectations at 0.2% VS 0.3%. The unemployment rate has gone up to 3.6% from the 50-year record low of 3.5%. Higher than expected data on nonfarm payrolls was released when 48,000 General Electric workers returned to work on Saturday, October 26th after 6 weeks spent on strike.

Job growth has averaged to 167,000 per month in 2019, compared with an average monthly gain of 223,000 in 2018. Food and beverage services (+48,000 jobs), social assistance (+20,000 jobs), and financial sectors (+16,000) increased employment in October. Jobs in professional and business services as well as healthcare also continues to increase.

Manufacturing employment decreased by 36,000, and Federal government employment was down by 17,000 during October.

Overall, this upbeat report goes hand in hand with the FOMC’s decision to pause monetary easing.

Manufacturing PMI followed the nonfarm report with the data slightly below the forecast, yet above the previous result of 51.3. IMS Manufacturing Employment and PMI add to the USD-related macroeconomic excitement of this Friday. Data on ISM Manufacturing Employment exceeded the expectations with the reading of 47.7 VS the forecast of 46.4, and the previous reading of 46.3. ISM Manufacturing PMI reading was slightly worse than expected: 48.3 VS the forecast of 48.9, but still better than the previous result of 47.8.

As a result, EURUSD dropped on upbeat nonfarm payrolls on a 4HTF, got to the support level at 1.11283, and bounced up on weak Manufacturing PMI. The price spiked but couldn’t get over today’s high at around 1.11685.

Technically, all three moving averages are pointing up. The 50EMA corresponds with the line of the uptrend. There is a strong level of resistance, which has worked as a global trend line down since 2018  around 1.11850.

The resistance can be met first at 1.11627, followed by today’s high at 1.11688 and then 1.11795.
The support is at 1.11283, which is followed by 1.11047, then 38.2% Fibo at 1.10827, and then 1.10660 close to the 200EMA.

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