As a week of high impact economic news draws to an end, all eyes will be on today’s Non Farm Payroll data. According to analysts, the U.S. economy added 390,000 jobs in April, a drop from the 431,000 increase in March. Read on for expectations for this month’s data and forex signals for EUR/USD, GBPUSD, and USDCAD. 

Today’s release could pump even more volatility into the foreign exchange markets following a week of high impactful news. 390K is the expected figure, down from 431K last month. Although it’s worth noting that forecasted figures have been substantially out more than a few times in the past 12 months and today could be no different. 

Last month’s data was lower than expected, at 431K, which was a large drop from March’s 750K new job additions. Wednesday’s ADP figure came in at 247K, much lower than its forecasted 382K indicating today’s NFP could follow suit. The unemployment rate is expected to improve to 3.5% in April, compared to 3.6% in March. 

Traders can monitor how far above or below the data release is compared to analysts expectations. Anything over the expected 390K could provide an opportunity to sell dollar crosses, while a weaker than expected figure could help time buys for USD pairs. Below are three forex signals ahead of today’s data release.

Euro’s sell off against the dollar had a breather this week with the pair moving sideways for the past few days. Wednesday’s FOMC initiated move higher was quickly erased yesterday. Today’s NFP gives a couple of scenarios that could play out. 

A strong number today could see the pair continue its bearish momentum. Long term support at about 1.0500 (green line in chart above) has held and helped the market form a channel. Better than expected data would favour a move below the range and support level. Weaker than forecast data would likely see a move towards the upper end of the range.

Yesterday’s BOE rate decision saw bearish price action in Cable. The pair stalled just above long term support at 1.2251 before moving higher on Friday morning. Today’s Non-Farm Payroll data may push the pair further lower, although near term upside targets are still in play. 

A better than expected NFP data release would result in dollar strength. Cable could see another run for its long term support (green line on chart above) and a continuation lower. On the flip side, a weaker number today may help sterling push higher with a price inefficiency (green arrows) being a suitable target.

From a longer term point of view, USDCAD has not been moving for many months now and has been trading sideways. Monday’s trading session saw the pair spike above its most recent high at around 1.2900 before moving back lower. Today’s data could help its price break back and hold above. 

A better than anticipated figure today would likely result in dollar strength, pushing USDCAD higher. Initial targets would be the minor double top (green line) followed by its previous high (red line) at 1.2900. A weak figure may see a sell off back towards the 1.2500 level, although that’s still some way away.

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