Equity markets continue to rise as the global economic outlook improves ahead of the all-important U.S Non-Farm Payrolls (NFP) report this Friday at 15:30 SAST.

Futures market rose on Wednesday as vaccine roll outs accelerates across the globe while governments are positive on spending to assist the recovery from the pandemic. Market participants will have their sights on U.S jobs data this week after a the previous dismal NFP number.

Here is what’s expected this week:

The U.S Non-Farm Payrolls (NFP)

Jobs number:

The number of new Non-Farm jobs for January is expected to come in significantly higher than the previous reading for December 2020 of -140K. 

• U.S Non-Farm Payrolls data is expected to move back into positive territory with 50K employed for the month of January 2021.

Hourly earnings:

The Average hourly earnings (M/M) (JAN) data is expected to decrease to 0.3% from 0.8% while the Average hourly earnings (Y/Y) (JAN) is expected to see a slight decline to 5.0% from the previous months number at 5.1%

U.S. Unemployment Rate:

The U.S. Unemployment Rate measures the percentage of the total workforce that is unemployed and actively seeking employment during the previous month.

• The U.S. Unemployment Rate is watched closely for signs of economic recovery and is expected to remain unchanged at 6.7%.

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 in farm jobs. 

The Wall Street 30 Technical Analysis

The price action on the wall street 30 has seen some wild swings over the last week which has seen the price action test both the support level at 30016 and resistance at 30774. We might expect the price action to move lower if it cannot break through the 30774-resistance level.

On the long side we are looking for a breakout to the 31224 level and after that our possible long-term target of 31595. On the short side, if the 30774-resistance level holds then price should target lower levels at 30506 and ultimately the 30016-support level.

• The price action on the WS30 is consolidating at the 30774-resistance level on the 4H chart and we will be looking for a breakout to target the 31224 level of interest.
• The 50-day SMA (blue line) is acting as support which could support the move higher.
• The Relative Strength Index (RSI) is above the midpoint mark and I will be looking for a bounce on the indicator to support the move higher.

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

When will the NFP economic announcement take place?

U.S Non-Farm Payrolls (NFP) report this Friday, 5 February 2021, at 15:30 SAST .

Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 3^rd of February 2021) U.S Market open.

Sources – MetaTrader5, Reuters

Barry Dumas | Market Analyst at GT247.com

Barry has 12 years 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.

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