The Non farm Payroll story is not necessarily the forecast but the alignment of averages viewed in 5 year increments since the February 1939 inception. Every average from 5 – 77.2 years are either in perfect balance or oversold. The prior job gains over the past 3 months saw significant rises to longer term averages. Just 3 months ago, averages from 30 to 70 years were located at about 96. Today, averages from 30 to 77.2 years in 5 year increments are positioned from 119.68 to highs at 133.87. Exclude the 119 low, averages are still positioned from 121 to 133. So dramatic and strong were the rises, averages from 25 – 77.2 year crossed above the 7, 10, 15 and 20 year averages. Should the trend continue and it appears it will then job gains are slated for significant rises over coming months.
Viewed from targets, averages from 5 to 72.7 years forecast lows at 280 to highs at 357. Specifically, 15 of 17 total averages forecast job gains from 326 lows to 357 highs. The problem for this month is located in averages from 1 – 5 years.
The forecast is 200,000. Normally, expected forecasts are seen from 5 year averages so accurate predictions can be offered. Not this month. By itself, 200,000 is not significant but its positioned just below averages 1 – 5 years and above averages from 7 – 77.2 years. To move higher, job gains must cross 203.96, 205.50, 217, 219.75, 222, 224, 225.13 and 230.54. If gains cross 230.54 then every average from 1 – 72.2 year would provide solid supports The 5 year target is actually 280.60.
Below 200,000, 15 support points exist within the total of 20 averages from 151 lows – 172 highs. The 1, 2 and 3 year averages forecast 159.08, 160.58, 155.79 and well within the normal 50,000 per month job gain range. Key to any forecast is 50,000 ranges from 200,000 which means 250 above to break important 230 and 150,000 below.
Forecast is a break of 203 and 205 to place the range between 205 – 217 with a view to see higher job gains in the months ahead. The caveat to the current range is once payrolls are released then all averages adjust to the new number so 205 - 217 range will be very close for next month. Above 230, EUR/USD and GBP/USD will see significant downsides.