The non-farm payroll (NFP) report is a key economic indicator for the United States. It is intended to represent the total number of paid workers in the U.S. minus farm employees, government employees, private household employees and employees of nonprofit organizations.

Global markets are higher and the U.S Non-Farm Payrolls (NFP) report is live this Friday the 6^th of August 2021 at 14:30 SAST with much volatility expected across the board.

U.S companies are leading the charge with strong earnings which has seen the S&P 500 close at another record high. The benchmark index rose 0.8% and closed at 4425.15 while the Dow Jones and tech-heavy Nasdaq gained 0.8% and 0.6% respectively.

Here is what’s expected this week:

The U.S Non-Farm Payrolls (NFP) 

The much-anticipated NFP report will emphasize the importance of the U.S labour market to the broader economy, as stronger payrolls could see a stronger greenback.

The U.S Federal Reserve Bank comes back into focus with stronger labour data as this might lead to the central bank revising its monetary stimulus policies.

Jobs number:

The number of U.S Non-Farm jobs for the month of July is expected to come in slightly higher than the previous reading for June 2021 at 880K new jobs. 

Hourly earnings:

The average hourly earnings (M/M) (Jul) data is expected to remain unchanged at 0.3% while the average hourly earnings (Y/Y) (Jul) is expected to increase to 3.9%.

U.S. Unemployment Rate:

The U.S. Unemployment Rate (Jul) is widely expected to come in at 5.7% this Friday.

The unemployment rate measures the percentage of the total workforce that is unemployed and actively seeking employment during the previous month. The unemployment rate data point can be used as an indicator to see if an economic recovery is underway.

The Wall Street 30 Technical Analysis

THE Wall Street 30 (WS30) is back at resistance after finding support and testing our possible short term target price at 34671 as discussed in our previous WS30 note. The FMOC announcement last week brought volatility back to the market and we might see even more this Friday with NFP.

Our price levels are unchanged and our possible long target at 36030 is still in play after a preferred retest of the major 35183 resistance level.

• The WS30 price action is consolidating at the 35183-resistance level which is now a major level to watch this week.
• The 50-day SMA (blue line) is acting as support to the price action on the 4H chart and will be watched closely if the price starts to push higher from here.
• The Relative Strength Index (RSI) is still consolidating above the 50 levels on the 4H chart.

Chart Source: Wall Street 4H Timeframe  - GT247 MT5 Trading Platform

Why is the jobs number important?

The Non-Farm Payrolls report (NFP) is treated as an economic indicator for people employed during the previous month, and the number being released will have a direct impact on the markets. In the United States, consumer spending accounts for most of the economic activity, and the Non-Farm Payrolls report represents 80% of the U.S. workforce. Farmers are excluded from the employment figures due to the seasonality of farm jobs.

Trading Term of the day:

Non-Farm Payroll:

When does the Non-Farm Payroll Announcement take place in South African time?

U.S Non-Farm Payrolls (NFP) report is live this Friday the 6^th of August 2021 at 14:30 SAST

Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 4^th of August 2021) U.S Market open.

Sources – MetaTrader5, Reuters.

Barry Dumas | Market Analyst at GT247.com

Barry has 12 years of experience in the financial markets. He enjoys educating clients on trading / investing and providing punchy technical analysis on securities. He currently holds a Wealth Management qualification and is studying towards becoming a Chartered Market Technician® (CMT) designation holder.

Disclaimer:

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