Today’s main economic event is the American labor market data for April. Market participants are waiting primarily for unemployment statistics and non- farm payroll.
Unemployment rate – is the index showing percentage ratio unemployed people to the aggregate number of the employable population in the country. It is expected that in April unemployment rate in the USA will continue to decline, amounting to 5.4%. Note, that the number of 4-5% is considered as the normal rate of unemployment. The American labor market is slowly approaching this level in the past few months.
The data on non-farm payroll is not as cheerful. In March this index fell significantly, demonstrating slowdown in the growth of employment rate. It is expected that in April the number of jobs can increase from 126 thousand to 224 thousand.
Note that the leading indicators give mixed information. ADP index fell from 175 thousand to 169 thousand in April. The number of corporate layoffs has increased by 52.8%. The number of initial and secondary applications for unemployment benefits continues to grow. Based on all the facts we can assume that NFPR will increase in April, but it will not reach the expected level that can have a negative impact on the American currency.
Therefore, during the day the USD is likely to decline against its major counterparts. The price of the pair EUR/USD can reach the levels of 1.1355-1.1390. If experts’ expectations prove to be correct, the quotes can drop to 1.1170 and 1.1100.