Selling EURUSD on US employment growth

May's data on the US labor market will be released today.

The Bureau of Labor Statistics' monthly report, scheduled to be published at 12:30 GMT, is expected to show that non-farm payrolls increase by 185,000, while the unemployment rate remains unchanged at 3.9% compared to the previous month. In April, the US economy added 175,000 jobs and the unemployment rate unexpectedly surged to 3.9%.

According to Bloomberg, the key indices to pay attention to are as follows:

Non-farm payrolls: +185,000 compared to +175,000 a month earlier;

Unemployment: 3.9% compared to 3.9% previously;

Average hourly earnings (month-over-month): +0.3% compared to +0.2% previously;

Average hourly earnings (year-over-year): +3.9% compared to +3.9% previously;

Average hours worked per week: 34.3 compared to 34.3 previously.

The report comes at a time when EURUSD has hit local highs since March due to plenty of weaker-than-expected economic data that boosted investor confidence that the Federal Reserve (Fed) may cut interest rates in September. Based on today's CME FedWatch Tool data, markets are pricing in a 67% chance of a Fed rate cut in September compared to about 50% a week ago.

A key question for Friday's report as well as for the rest of 2024 will be whether the slowdown in monthly job growth is simply a sign of normalization in the labor market or early signs of a broader economic downturn.

The overall recommendation is to sell ЕURUSD if the US unemployment rate is less than 3.9%.

Profits from selling EURUSD should be taken at the level of 1.085. A Stop-Loss could be set at the level of 1.092.