The United States Bureau of Labor Statistics (BLS) is set to publish the delayed January US Nonfarm Payrolls (NFP) report on Wednesday at 13:30 GMT.
The employment data is expected to spark renewed volatility in the US Dollar (USD), as market participants look for clearer signals on the Federal Reserve’s next move on interest rates.
What to Expect from the January Jobs Report
The BLS confirmed last week that the official employment release, initially scheduled for Friday, had been postponed due to the partial government shutdown. After lawmakers approved a measure on Tuesday to reopen the government, the agency announced that the labor market data would be released on Wednesday, February 11.
Economists forecast that the US economy added 70,000 jobs in January, following December’s 50,000 increase. The Unemployment Rate is projected to hold steady at 4.4%. Meanwhile, annual wage growth, measured by Average Hourly Earnings, is expected to ease slightly to 3.6% from 3.8%.
Analysts at TD Securities anticipate even softer job growth, estimating a 45,000 increase in US Nonfarm Payrolls. They expect private employment to rise by 40,000, with government payrolls adding 5,000 positions. Job gains are likely to be concentrated in healthcare and construction. They also expect the Unemployment Rate to remain unchanged at 4.4%.
According to their assessment, the labor market continues to reflect a “low-fire, low-hire” environment. They project Average Hourly Earnings to rise 0.3% month-over-month and 3.7% year-over-year.
Potential Impact on EUR/USD
The US Dollar began the month on solid ground after Kevin Warsh, a former Fed Governor, was nominated as the next Federal Reserve Chair. The currency also found support amid heightened volatility in precious metals and equity markets. As a result, the USD Index advanced 0.5% during the first week of February.
Fed Governor Lisa Cook recently stated that the labor market remains supported by last year’s rate cuts and appears balanced. She added that policymakers remain alert to the possibility of rapid changes in conditions. Governor Philip Jefferson echoed similar views, noting that the labor market appears stable, characterized by limited hiring and layoffs.
According to the CME Fed Watch Tool, markets currently assign roughly a 15% chance of a 25-basis-point rate cut in March.
If the US Nonfarm Payrolls (NFP) report disappoints, particularly with job growth below 30,000 and an unexpected rise in unemployment, the USD could weaken, potentially lifting EUR/USD. Conversely, payroll growth in line with or above expectations may reinforce the case for the Fed to keep rates unchanged next month, which could support the Dollar.
Wage data will be closely monitored as well. Softer-than-expected growth in Average Hourly Earnings may limit the Dollar’s gains, even if overall payroll figures meet projections.
Analysts at Danske Bank highlight signs of cooling in the labor market. January’s Challenger report indicated more job cuts than expected, and December’s JOLTs Job Openings came in at 6.5 million, below the 7.2 million consensus. The ratio of job openings to unemployed workers declined to 0.87, suggesting easing labor demand. Historically, such trends often precede slower wage growth, which could weigh on consumer spending and strengthen the argument for earlier rate cuts.
Technical Outlook for EUR/USD
From a technical standpoint, EUR/USD continues to show resilience. The Relative Strength Index (RSI) on the daily chart remains above 50, while the pair trades above the 20-day Simple Moving Average (SMA), indicating buyers are maintaining control.
On the upside, the 1.2000 psychological level stands as immediate resistance, followed by 1.2080 and 1.2160.
On the downside, initial support is seen near 1.1680, where the 100-day SMA sits. Below that, the 1.1620–1.1600 region, which aligns with the 200-day SMA and a Fibonacci retracement level of the broader uptrend, could act as a stronger support zone. A decisive break beneath this area may trigger additional selling pressure and extend the decline.
