The NFPs are approaching fast. According to economists, on Friday, April 5, at 13:30 BST, the US economy is anticipated to have added 212K new jobs.
The 212K forecast is similar to last month's 198K forecast. In fact, since November 2022, the forecasted outcome has been around or below 200K. However, we had extreme outcomes, like the 336K in October 2023 and 356K in January.
Many of these readings have later been revised lower. Yet, at the time, it undoubtedly lowered the probability of Fed rate cuts and, most recently, boosted the dollar.
The market expected about six rate cuts at the start of the year and is now happy if the Fed cuts rates three times. However, even three rate cuts are no longer certain, as most US data has been beating expectations lately. This past Monday, the ISM manufacturing index turned positive for the first time since October 2022. So, given that economists keep misjudging the US economy's strength, what could happen if NFP beats expectations again?
If the NFPs are better than expected, I would focus on GBP/USD. In the case of a soft NFP reading, I would set my attention on ETHUSD
GBP/USD has been stuck in a rectangular pattern for 127 days at the time of writing, and the difference between the pattern low and high is almost 300 pips. With this said a break to the lower limit at 1.2519 might send the price to 1.2228. Failure to breach the lower end of the range will result in more sideways trading.
GBP/USD daily chart
If the NFPs are slightly weaker than expected or in line with expectations, Ethereum could be a big winner, except in cases where NFPs are near 50K and hinting at a recession.
ETHUSD is in a bull trend, and we are heading toward the Bitcoin Halving on April 19, an event expected to boost prices. The price is trapped in a triangle pattern, and support was found near the March low of $3052. If the price could turn higher just above this level and then break the downward trendline shown in the chart below, ETH could reach a fresh 2024 high of $4252. However, if the NFPs are too strong and the likelihood of Fed rate cuts is further lowered, we could see lower ETH prices on a breach of the March low.
ETH/USD daily chart
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